Subject Matter Expert & CWA (Inter)
134 Points
Joined June 2011
Bank reconciliation refers to a process that compare two sets of records (usually the balance of two accounts) to make sure they are in agreement.
First Method (Starting With the Cash Book Balance):
a. Cash book balance (debit)-
Less: All cheques, drafts etc., paid into the bank but not collected and credited by the bank
Add: All cheques drawn on the bank but not yet presented for payment.
Bank statement balance-
b. Cash balance (credit)-
Add: All cheques, drafts etc., paid into the bank but not collected and credited by the bank
Less: All cheques drawn on the bank but not yet presented for payment.
Bank statement balance-
Second Method (Starting With the Bank Statement Balance):
a. Bank Statement Balance Dr. Balance (overdraft) -
Less: Cheques, drafts etc paid in to bank but not collected & credited by bank -
Add: Cheques drawn on the bank but not yet presented for payment
Closing Cash book balance
b. Bank statement balance is a credit balance (in favor of the depositor)
Add: All cheques, drafts, etc., paid into the bank but not collected and credited by the bank
Less: all cheques drawn on the bank but not yet presented for payment.
Closing Cash book balance