Slide 1 This video is an introduction to Bank reconciliation.

Hallo and welcome to FAC1503, Financial Accounting Principles for Law practitioners. This video
covers the section on bank reconciliation statements. I am your lecturer, and I will be conducting this
specific video.
This section of learning unit 3, Sundry items is where the bank reconciliation syllabus is housed. This
Slide 2 section of the new learning unit will explain the purpose of the bank reconciliation system and
describe the various reconciling items. This will enable you to prepare a bank reconciliation
statement.
After studying this learning unit, you should be able to:
• Explain the purpose of a bank reconciliation, and
• List the various reconciling items, as well as
• Prepare a bank reconciliation statement.
Slide 3 Some of the reasons that two balances do not agree, that is the balance of the bank
reconciliation statement, and the balance of the cash book could be outstanding electronic
transfers, outstanding deposits, direct deposits, direct electronic transfers and debit orders,
bank fees, interests, and direct deposits. This is the reason why we prepare a bank reconciliation
in order to identify the discrepancies between cash book or cash journal and the bank
statement to identify items that are in the accounting journals but not on the bank statement
and to identify items that are in the bank statement but not in the cash book.
Typically, items that will be in the cash book but not on the bank statement will be outstanding
direct deposits and outstanding electronic transfers. The same is true for items that are in the
bank statement and not in the cash book. This is where there are bank fees charged by the
bank or interest or direct deposits are made but they are not in the cash book, we haven’t
recorded them in our accounting records.
Slide 4 The objective of the bank reconciliation statement is to ensure that all transactions has been
correctly recorded in the cash journals.
Slide 5 Thank you.