A bank reconciliation
is needed to identify errors, either in the cash book of the business or errors
made by the bank itself.
is needed to identify errors, either in the cash book of the business or errors
made by the bank itself.
a. Errors, once
identified, must be corrected. Most errors are likely to be made by the
business itself rather than the bank and they should be corrected in the cash
book.
identified, must be corrected. Most errors are likely to be made by the
business itself rather than the bank and they should be corrected in the cash
book.
b. Bank charges should be
credited in the cash book of the business and debited to the account for bank
charges in the nominal ledger.
credited in the cash book of the business and debited to the account for bank
charges in the nominal ledger.
c. Time difference should
be listed and ought to reconcile the balance on the bank statement with the
balance on the corrected cash book.
be listed and ought to reconcile the balance on the bank statement with the
balance on the corrected cash book.
