Procedure for Bank Reconciliation

The cash book and bank
statement will rarely agree at a given date if you are doing a bank
reconciliation, you may have to look for the following items;
a.    Corrections and Adjustments
to the cash book for;
     i.       
Payment
made into the account or from the account by way of standing order, which have
not yet been entered in the cash book.
    ii.       
Dividends
received (on investments held by the business) paid direct into the bank
account but not yet entered in the cash book.
   iii.       
Bank
interest and bank charges, not yet entered in the cash book.
b.    Item reconciling the
correct cash book balance to the Bank statement namely;
i.            
Cheque
drawn (i.e. paid) by the business and credited in the cash book, which have not
yet been presented to the bank, or “cleared” and so do not yet appear on the
bank statement.

Cheque
received by the business, paid into the account and debited in the cash book,
but have not yet been cleared and entered in the account by the bank, and so do
not yet appear on the bank statement.

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