ANSWERS: 1
  • A bank reconciliation statement is a form used to compare personal banking records to the bank's record of transactions to determine if there are any discrepancies.

    Reasons for Discrepancies

    Inconsistencies can be caused by timing differences between the bank's postings and entries in your register, by missed items or by errors made on either side. A bank reconciliation should be completed each time a statement is received to correct any differences.

    Compare Documents

    A statement and check register must be compared line by line to be sure all transactions appear on both. Missing items or additional entries must be accounted for.

    Adjusting Bank's Balance

    Starting with the bank's ending balance, add "deposits in transit" (deposits made after the statement end date), deduct "outstanding checks" (checks not yet cleared through the bank) and look for possible banking errors.

    Adjusting Book Balance

    Using the ending register balance, deduct service charges (amounts charged by the bank for services rendered), add any interest earned and correct any recording errors.

    Helpful Hint

    If balances still do not agree, repeat the process. Accounting coach.com offers this hint: "Put it where it isn't." Transactions must appear on both records.

    Source:

    Investopedia.com

    Accounting coach.com

    More Information:

    Accounting Coach.com

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