BANK

RECONCILIATION
STATEMENT
WHAT IS A BANK RECON?

• It’s a statement used to reconcile the cash books

(CRJ and CPJ) and bank statement of the business.
STEPS IN THE RECONCILIATION
PROCESS
1. Compare each item in the bank statement and in the CRJ and CPJ.
2. Circle any item that does not appear in both sets of records.
3. Items that appear on the bank statement but not in the cash journals (CRJ and CPJ) must
be entered in the supplementary bank account.
4. Items that appear in the cash journals (CRJ and CPJ) but not on the bank statement must
be entered on the bank reconciliation statement (BRS).
5. Any errors that that have been made in the cash journals must corrected in the
supplementary bank account.
6. Any errors made by the bank in the bank statement must be entered in the BRS.
EXAMPLES OF ITEMS NOT APPEARING
IN THE BUSINESS CASH JOURNALS
• Bank charges
• Payments made by the bank stop orders or debit orders for e.g. insurance premiums
• Deposits made directly in our bank account.
• Dishonored cheques.
• Interest paid or received.
• NB: These items don’t appear in the books of the business and must be entered in
the supplementary bank account.
EXAMPLES OF ITEMS NOT APPEARING
IN THE BANK STATEMENT
• Deposits made but not yet recorded by the bank
because they were made close to the statement date.
• Cheques issued but not yet recorded by the bank
because they have not been cleared but the bank.
 QUESTIONS

Solutions to question at the end of the chapter are

posted on Ethuto.

(Sources :Accounting for all third edition and Basic accounting for
non-accountants third edition.