How To - Prepare a Bank Reconciliation

You need to do a bank reconciliation to verify that the amount of cash you think you have in your bank account ties in with what the bank says you have.

The balance in your cashbook will never agree with the balance showing in the bank statement (the bank account books) because of the delays in the bank receiving the deposits you have made and the delays in having checks written out by you presented by those you sent your checks out to.

Steps to follow for compiling a bank reconciliation:

  • Write up your cashbook so it is as up to date as possible.

  • Check off from your cashbook against your bank statement all the checks you have written and the deposits you have received.

  • Check off against the bank statement all the deposits you have made and all the payments of checks you have paid out.

  • After that is done, prepare a list of all deposits in transit. These will be the deposits not yet credited.

  • Prepare also a list of all the checks that you have sent out but which do not appear yet in the bank statement. These will b...

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How To

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