BANK RECONCILIATION

STATEMENT
BY AAQILAH 10 GP3 (2024)
The Meaning of Bank
Statements
You'll find records of all transactions—both
incoming and outgoing—so you know exactly what
was going on with your funds during that period.
• An official document that summarizes your
account activity over a certain period of
time – typically one month USE / PURPOSE?
= Provide a reliable record of
transactions in your checking,
savings, and other types of bank
accounts.

Your bank statement is a one-stop shop for keeping track of

 deposits,
 withdrawals,
 fees,
 and credited interest.
They can also help you Track your spending habits.
 What is bank
reconciliation statement?
Provide a reliable record of transactions in your
• Checking
• Saving
• And other types of bank statement
This included :
Use for / purpose? • Deposits
• To detect errors • Withdrawals
• Identify fraudulent activities • Fees
• Monitor cash flow • Interest credited
• Ensure accurate financial reporting
The quickest way to identify any discrepancy between
balance
 BANK RECONCILIATION STATEMENT
• When all entries are made correctly , the
Cash Book balance and the Bank
Statement balance should equal.
• If the two balance do not AGREE , you
need to prepare a bank reconciliation
statement to reconcile the balances.
REASON FOR DISCREPANCY(ERROR)
BETWEENCASH BOOK BALANCE AND BANK
STATEMENT BALANCE.
KEYWORDS
a) Not yet presented / not
appeared in the bank
statement / not been presented
– unpresented cheque
b) Paid into the bank – uncredited
cheque
c) Cheques returned / return by the
bank – dishonoured cheques
 A] Entries in the cash book
but not found in the bank
Discrepancies between statement
cash book and bank
statement B] Entries in the bank
statement but not found
the cash book
 A] Entries in the CASH BOOK but NOT FOUND in the BANK
STATEMENT

Dr. [DEBIT] [CREDIT] Cr.

Uncredited cheques/Deposit Unpresented Cheques

- Cheques received have not been - Cheques issued by the trader

credited by the bank. have not been presented to the
bank for payment.
 BANK RECONCILIATION STATEMENT AS AT XX XXX XXXX

Debit Balance as per Cash Book (updated) xxxx

[add ] : Unpresented Cheques xx Bank Reconciliation Statement
starting with ADJUSTED
xxxx
BALANCED in the Cash BOOK
[less] : Uncredited Cheques (xx)
Credit Balance as per Bank Statement xxxx

BANK RECONCILIATION STATEMENT AS AT XX

XXX XXXX
Credit Balance as per Bank Statement xxxx
Bank Reconciliation
Statement starting with [add] : Uncredited Cheques xx
CREDIT BALANCE AS PER xxxx
BANK STATEMENT [less] : Unpresented Cheques (xx)

Debit Balance as per Cash Book xxxx

 B) Entries in the BANK STATEMENT but
NOT FOUND the CASH BOOK
Dr. [Debit] [Credit] Cr.
[DIRECT PAYMENT] [DERICT DEPOSITS]
1. Bank charges for 1. Credit Transfers
a) Commission
b) Cheque Books 2. Dividends Received From
c) Interest On Overdraft Investment
2. Standing Order
3. Interest On Fixed Deposit
3. Dishonoured Cheque Account
 ADJUSTED CASH BOOK
Dr. Cash Book [Bank Column Only]
Balance b/d
C – Credit Transfer
I – Interest Received
D - Dividends
$ $
X B - Balance b/d (overdraft)
B – Bank Charges
I – Interest Charges
D – Dishonoured Cheque
S – Standing Order
Balance c/d
Cr. If The Closing Entries On Debit
Side
= the BRS started at Debit Balance as
per Cash Book (updated) / BRS starting
with ADJUSTED BALANCED in the Cash
BOOK
y

Balance b/d Y
Dr. Cash Book [Bank Column Only] Cr.
$ $

Balance b/d B - Balance b/d (overdraft) x

If The Closing Entries On Credit B – Bank Charges
Side C – Credit Transfer
I – Interest Received I – Interest Charges
= the BRS started at Credit Balance D – Dishonoured Cheque
as per Cash Book / BRS starting D - Dividends
S – Standing Order
with CREDIT BALANCE AS PER Balance c/d y
BANK STATEMENT
Balance b/d Y
STEPS IN PREPARING THE BANK
RECONCILIATION STATEMENT
4. R – REVERSE

C
1. C – COMPARE  Reverse :
 LOOK and COMPARE the amount both  Bank Statement to Cash Book : The Amount
in the Cash Book and Bank Statement. which are circled in the Bank Statement

C should be put in the Cash Book.

 Cash Book to Bank Statement : The Amounts
circled in Cash Book should be put in the Bank
2. C – CANCEL
 Cancel Out
 The amount which is the
C Statement.

R
5. O – OPEN
SAME in the Cash Book  OPEN up the adjusted Cash Book ( use
and the Bank Statement. the latest balance brought brought

O
 Bank error corrected
down at the end of the year)
3. C – CIRCLE

P
 CIRCLE the amount which are 6. P – PREPARE
LEFT OUT in the Cash Book and  PREPARE the Bank
Bank Statement. Reconciliation Statement
THANK YOU FOR
YOUR
ATTENTION