BANK RECONCILIATION______________________ 1.

Collections made by the bank on behalf of the

depositor
Bank reconciliation statement – is a report that is
2. Interest income earned by the deposit
prepared for the purpose of bringing the balances of
3. Proceeds from loan directly credited/added by
cash per records and per bank statement into
the bank to the depositor’s account
agreement
4. Unrolled-over matured time deposits
Monthly – how often bank reconciliations are prepared transferred by the bank to the entity’s account
Bank statement – is a report issued by a bank that Examples of debit memos
shows deposits and withdrawals during the period and
1. Bank service charges for fees, penalties, and
the cumulative balance of a depositor’s bank account
subcharges
Checking accounts – accounts where bank 2. No sufficient funds check (NSF) or Drawn
reconciliations are normally required against insufficient funds check (DAIF)
ABC Co. 3. Automatic debits, such as when the depositor
Bank Reconciliation and the bank agrees that the bank will make
For the month ended, Jan 1, 20x1 automatic payment of bills on behalf of the
Balance per books, end Balance per bank, end depositor
4. Payment of loans which the depositor agreed to
Add: Credit Memos Add: Deposits in Transit
be made out directly from its bank account
Less: Debit Memos Less: Outstanding Checks
Book reconciling items
Add/Less: Book Errors Add/Less: Bank errors
1. Credit memos
Adjusted Balance Adjusted Balance 2. Debit memos
3. Book errors
Balance per books, end – the cash balance in the Bank reconciling items
accounting records as of the end of the current month
1. Deposits in transit
Balance per bank statement, end – the ending cash 2. Outstanding checks
balance in the bank statement of the current month 3. Bank errors
Credit memos – are additions made by the bank to the
depositor’s bank account but not yet recorded by the
depositor (bank credits)
Debit memos – are deductions made by the bank to the
depositor’s bank account but not yet recorded by the
depositor (bank debits)
Book errors – errors committed by the depositor
Deposits in transit – are deposits made but not yet
credited by the bank to the depositor’s bank account
Outstanding checks – are checks drawn and released to
payees but are not yet encashed with the bank
*Certified checks and Stale checks are excluded in
outstanding checks*
Bank errors – errors committed by the bank

Examples of credit memos