BANK RECONCILIATION STATEMENT
It is a document prepared by business at regular intervals to check that their bank records agree with those provided by the bank.
What is it ?
Advantages are
1. To checks that if cash book and bank statement are different. The differenet is caused by timing rather than errors.
2. To make sure that the cash book is fully updated by including transactions undertaken automatically by the bank.
3. Reduce the risk of fraud aking place as there are frequent checks on the important business financial record.
CASH BOOK
BANK A/C
Dec 1 Balance b/f 400
Dec 29 J.Potter 60
Dec 31 M.Johnson 220
Jan 1 Balance b/d 560
Dec 28 J.Jacob 105
Dec 30 M.Chatt 15
Dec 31 Balance c/d 560
BANK STATEMENT
Dec 1 Balance b/f 40 Cr
Dec 29 Cheque 60 Cr
Dec 30 J.Jacob 105 Dr
Dec 30 BGC 70 Cr
Dec 30 Bank charges 20 Dr
Closing balance 405Cr
Bank
Giro
Credit
(online)
BANK RECONCILIATION STATEMENT
Balance as per cash book 560
Add; Unrepresented cheque 15
BGC 70
Less; Bank charges 20
Bank logdement 220
Balance as per bank statement 405