BANK RECONCILIATION SUMMARY NOTES

Bank Reconciliation Statement:

- It is for bringing cash balance per records and per bank into agreement/equally.
- Monthly basis
- Shows DEPOSIT and WITHDRAWALS
- Separate bank recon. For a different bank account
- CHECKING ACCOUNT

Pro forma:

COMPANY NAME

BANK RECONCILIATION

For the month ended Jan. 31, 2019

Balance per book, end (balance as of Jan. 31, 2019) current month balance

Add: Credit Memos (additions in the book, the bank already record it such as Collections, proceeds)

Less: Debit Memos (deduct in the book, the bank already record such as Service charge, NSF)

Add/Less: Book errors (errors committed by depositors, accountants)

Adjusted balance

Balance per bank statement, end (balance as of current month)

Add: Deposit in transit (deposits made but not yet credited at the bank, cut-off date)

Less: Outstanding checks (checks drawn but not yet encashed at the bank)

Add/less: Bank errors (errors committed by the bank)

Adjusted balance

CONCEPT

In the bank reconciliation:

*All errors that make a bank/book ending balance understated ADD, &
*all errors that makes bank/book ending balance in overstated DEDUCT
Book errors

Nature of error Effect of ending balance Correction

Understatement of book debit Understatement ADD
Overstatement of book credit Understatement ADD
Understatement of book credit Overstatement DEDUCT
Overstatement of book debit Overstatement DEDUCT
Bank errors

Nature of error Effect of ending balance Correction

Understatement of bank credit Understated ADD
Overstatement of bank debit Understated ADD
Understatement of bank debit Overstated DEDUCT
Overstatement of bank credit Overstated DEDUCT

BOOK TO BANK MEHOD

*Books are treated the same as they treated

*Bank are reversed

Book balance xxx

Add: Credit Memos xxx

Less: Debit Memos xxx

Add/Less: Book errors xxx

Less: DIT xxx

Add: OC xxx

Add: Bank overstated xxx

Less: Bank understated xxx

Adjusted bank balance xxx

BANK TO BOOK METHOD

*Bank are treated the same

*Book are reversed

Bank balance xxx

Add: DIT xxx

Less: OC xxx

Add/Less: Bank error xxx

Add: Debit Memos xxx

Lees: Credit Memos xxx

Add: Book overstated xxx

Less: Book understated xxx

Adjusted book balance xxx