Preparing a bank reconciliation statement

While preparing a bank reconciliation statement what are the significant things to be remembered?




- Bank Reconciliation Statement is made either by starting with the book Cash book balance or Bank pass book balance.
- When the balance of the Cash book is taken as a starting point then Cash book balance is to be altered in accord with the entries passed in the Bank pass book and vice versa.
- Cheques issued however not presented for payment;
- Amount credited in Passbook however not in Cash book;
- Deposits made in the bank straightly;
- Incorrect credits given by bank;
- Interest credited in Passbook.

The subsequent items will be subtracted:

- Cheques deposited however not cleared;
- Bank or Interest Charges debited through bank
- Direct payments made through bank not entered in Cash book
- Cheques dishonored not recorded in cash book
- Incorrect debits given through bank
- When it is prepared with the Bank balance as per the bank passbook, then the above process will be upturned that is, the items will be added to the pass book which was subtracted from the cash book balance and those items will be subtracted from the bank pass book balance that was added to the cash book balance.

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