Objectives: At the end of this tutorial students should be able to do the following:
Definition of bank reconciliation: Bank reconciliation is the process of updating the bank balance in a company’s cashbook and then reconciling it to the balance on the company’s bank statement. Bank reconciliation is necessary for the following reasons:
The bank balance in the cashbook may differ from that of the bank statement because of timing differences. Timing differences occur when a transaction is recorded in either the cash book or on the bank statement, but not in both at the point in time when the bank statement is generated. Some of the factors that may cause timing differences include:
Steps to follow to when reconciling the bank account:
Below is a generic format used for bank reconciliation: Summary of bank reconciliation steps:
I hope that you found this tutorial helpful, if you did please share it and feel free to ask questions or to comment below! Good luck!
2 Comments
11/10/2020 03:37:47 pm
These tips are all great for someone like me. I understand that it is not okay for some people to work hard, but it is what it is. These tips can help me with what I am facing right now. I have some problems with managing my accounts, and this is just what I needed. I seriously believe that it is only a matter of time before I can fix it, and that is all because of you, so thank you, my dude.
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7/28/2021 12:08:54 pm
It was really interesting to learn about how bank reconciliations are used to make sure that the balance of an account and transactions match each other. I would think that it would be a good idea for companies to perform this reconciliation around tax time. Making sure that your books are accurate seems like it would be crucial when submitting taxes.
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AuthorThe author holds a Bsc (Hons) Degree in Applied Accounting from Oxford Brookes University, England and enjoys a successful career as an Accounting Supervisor and a private tutor. ArchivesCategories
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