BANK RECONCILIATIONS NOTES

In order to verify the amount reflected in our bank account at the end of each month, a reconciliation must be made with the balance according to our bank account and the balance as reflected on the Bank Statement.

The bank will send us a statement of our account towards the end of each month.

Take note of the following with regard to the Bank Statement:

1. The bank will view the business as a CREDITOR since cash in the business account belongs to the business. Simply put, the bank OWES the business any cash in the bank account.

2. For the above reason, deposits will reflect as a CREDIT on the Bank Statement and payments as a DEBIT.

3. We need to reconcile the final balance on the Bank Statement with the closing balance in the business bank account.

The following steps should be followed:

1. Compare all entries in the cash journals against the entries on the Bank Statement. Tick the entries that appear in either the CRJ or CPJ and on the Bank Statement.

2. Check the entries in the bank column of the Cash Receipts Journal with the entries in the credit column on the ...

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