Bank

Reconciliation
Statement
What is Bank Reconciliation
Statement?
a document prepared by a company
that shows its recorded bank account
balance matches the balance the bank
lists. This statement includes all
transactions, such as deposits and
withdrawals, from a given timeframe.
Bank reconciling items are important in the preparation of
bank reciliation statement. As we have understood the
bank reconciling items, we found out that not all records
on both bank and book are always updated. To do this, we
need to compute and journalize these items to reconcile
the cash balances. This is important because it reflects the
correct amount of cash in the bank as that of the book and
is also important in the correct cash balance in the balance
sheet. The inconsistencies and inaccurateness of a
company’s bank account records may lead to working
capital shortage and affects the overall operations of the
business.
 STEPS IN PREPARING
BANK RECONCILIATION
STATEMENT
STEP 1: Get the ending cash balances for
both bank and cash ledger.
Illustrative Problem:
The following are the transactions of
ABM Consultancy Services. The balance
in the ledger is P39,500 while the bank
has P144,600.
Look at the book and bank records below.