-

BANK RECONCILIATIONS
A BANK STATEMENT is A list OF ALL OF THE CASH RECEIPTS AND WITHDRAWALS

THAT A BUSINESS thinks it HAS MADE OVER A PERIOD of TIME .

AND it is

MANAGED BY THE BANK

A CAM Book is AN
ACCOUNTING RECORD OF WHAT

A BUSINESS THINKS it HAS IN A BANK ALONG with

ALL THE CASH INFLOW ( DEBITS) AND OUTFLOWS CCREDIB)

it MANAGES BY THE BUSINESS ITSELF .

WHY DO THEY DISAGREE?

=OMISSIONS
-
RELATE TO TRANSACTIONS

THAT APPEAR ON THE BANK STATEMENT

BUT HAVENT YET BEEN RECORDED BY THE

BUSINESS in its CASHBOOK

#
ARE THE TRANSACTIONS THAT ARE RECORDED

IN THE BS AND THE CB IN DIFFERENT PERIODS .

→
UNRECORDED DEPOSIT . RELATES to CASH

THAT A BUSINESS RECEIVES AND Recorded

in its CB DURING ONE PERIOD BUT THAT DOESN'T APPEAR in its BS
until THE FOLLOWING PERIOD . CHEQUES or ELECTRONIC FUND TRANSFERS LEFT)
THAT THE B RECEIVES
.
FROM ITS CUSTOMERS TOWARDS THE END of the MONTH
That the BANK DOESN'T process IMMEDIATELY .

IN
OUTSTANDING CHEQUE is A cutout that A B . SENDS TO A SUPPLIER

ONE MONTH FOR A WHILE AND NOT ACTUALLY

,
that MIGHT JUST sit ON THEIR DESK

GET CASHED IN UNTIL THE FOLLOWING MONTH .

3- -

P
OFTEN
MORE HAPPEN IN THE CB
,
SO NEED to look
thEREFi
is to IDENTIFY SINGLE ONE OF THESE ERRORS SO WE KNOW
EVERY
WHAT is GOING ON .

THEN it POSTED into HE

-
GENERAL LEDGER AND BRING THAT VASH Book

UP TO DATE BY ACCOUNTING FOR Omissions AND CORRECTING FOR ERRORS .

TIMING DIFFERENCES CANNOT DO ANYTHING with THEM

,
ONLY TO IDENTIFY
AND LET THEM SORT THEMSELVES OUT IN A FUTURE PERIODS .

TO INSURE that YOUR Books ARE UP TO DATE AND TO GIVE AN

ACCURATE PICTURE OF THE BUSINESS .

ALSO Allows to CALCULATE THE

"
TRUE CASH BALANCE ' OF THE BUSINESS

BUSINESSES PREPARE them in A MONTHLY BASIS AFTER THEY

MOST
RECEIVE THEIR BS in THE END OF THE MONTH
 -

THE COMMON "" " " " ^^"

(
✓
I
y
 -

→
WE NEED TO ADD DEPOSITS IN TRANSIT
is TELLING US THAT
FOR A DEBIT THAT INCREASES OUR CASH IN THE OB AND
WE ARE LOOKING
it NOT APPEAR IN THE BS

+ 2220$
 IT -
NEXT is TO DEDUCT THE OUTSTANDING CUE QUES .
THESE THE B. SENT

BUT it WASN'T BEEN CASHED in TET

OUT TO its CUSTOMER this MONTH .

This will APPEAR AS A CREDIT in CB BUT NOT in THE BS

,
THE BRACKETS
is in
DEDUCTION
-
geo
=
( 910)

- .

'

it is '
TRUE CASH BALANCE
OF THE BUSINESS .

-
NOW LOOKING For omissions -

-
ENTRIES Which ARE IN BS ,
BUT

war in CB .

)
←
Missing Receipts LEFT
+ 1000

INTEREST Receipt

µ
107

/
+
 BAN K FEES

I
-50

[
DEDUCTED

BOUNCED CHEQUES
THESE CHEQUES that CUSTOMERS

HAVE MAILED TO US AND THAT WE'VE

,

DEPOSITED THEM IN THE BANK ,

BUT THEY HAVE BEEN REJECTED

DIDN'T HAVE
# BECAUSE THE CUSTOMER
# ENOUGH MONEY ON M'S ACCOUNT

NORMALLY LABELED AS NSF cheque

"

"
NOT SUFFICIENT FUNDS .

6000
DEDUCTED
-

-
 CHECK THE NOTE FROM A

BOOKKEEPER ABOUT this ERROR

it is correct in THE BS

¢ So Deduct 45 more
-

we

WE DANE ALL
ERRORS .

•
✓

ADJUSTMENTS THAT AFFECT

WE ONLY POST TO URAL ENTRIES FOR THE
0URcASHBO0K! DATE is THE SAME
FOR ALL ADJUSTMENT
JOURNAL ENTRIES AS WE
AT ,

ARE DOING IT IN THE

AH
END OF THE PERIOD (
Monty
At
REVENUE X ALL OF THEM HIT

CASH ACCOUNT , BECAUSE

At
it is A CASH Book
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4 EXPENSES

Ab
AT

Ab
Lb