This is mainly done when your cashbook balance doesn't match with the statement balance. But some companiess also follow the principle for security sake. Also, if you are well aquainted with accounts, you would find that there are many mistakes even after which you may have the same balances in both the books. like there may be an error in bith the books of the same amount etc.
Reconciliation process is called "bank reconciliation statement" under which both company accounts balance of cash and bank is reconciled with balance of bank account provided by bank statement. The process is that first of all one statement is treated as base statement, it may be bank statement or books bank account but it is normally bank statement and after that the second statement balance is reconciled for any unrecorded transactions or any cheques issued but not presented in bank and after the reconciliation is completed both book's bank account as well as bank statement balance should be tally otherwise any discrepancies should be investigated and resolved.
In almost all cases, the balance between the check book and bank statement will not match because any transactions that you did using your ATM/Debit Card will not be recorded in your check book. The balance on your bank statement will be accurate and that shows the actual amount of money you have in your account. If you do not use your check book frequently then the entries in it may be old and outdated.
Bank reconciliation statement as at 31st dec.2011 balance as per adjusted cash book xx add unpresented chque xx less uncredited chque xx balance as per bank statement xx
In order to see the difference between a bank balance and cash book,and see whether cheques or deposit made all appear in the bank statement
just you have to make the balance equal of cash & pass book ie through econciling the transaction by entering into pass book which is not entered in cash book
Reconciliation process is called "bank reconciliation statement" under which both company accounts balance of cash and bank is reconciled with balance of bank account provided by bank statement. The process is that first of all one statement is treated as base statement, it may be bank statement or books bank account but it is normally bank statement and after that the second statement balance is reconciled for any unrecorded transactions or any cheques issued but not presented in bank and after the reconciliation is completed both book's bank account as well as bank statement balance should be tally otherwise any discrepancies should be investigated and resolved.
A bank statement is neither an asset or owner's equity account. It is a source document for the determination of the correct cash in bank balance account of an entity, and after the final determination thereof, the cash in bank balance will be an asset account. The bank statement is secured from the bank where the entiity maintains an account and said statement is being reconciled with the book balances of the company for the said final determination of correct cash in bank balance prior to month end, quarterly closing and annual closing of a company.
You use the cash book balance. The bank balance on the bank statement is just used to reconcile to the cash book balance to see what is due to clear after the reporting period and verify that the cash book balance is correct.
Balance per book is company's record and balance per bank is banks record on the bank reconciliation.
In almost all cases, the balance between the check book and bank statement will not match because any transactions that you did using your ATM/Debit Card will not be recorded in your check book. The balance on your bank statement will be accurate and that shows the actual amount of money you have in your account. If you do not use your check book frequently then the entries in it may be old and outdated.
Bank reconciliation statement as at 31st dec.2011 balance as per adjusted cash book xx add unpresented chque xx less uncredited chque xx balance as per bank statement xx
to reconcile the cash book balance with the balance on the bank statement
In order to see the difference between a bank balance and cash book,and see whether cheques or deposit made all appear in the bank statement
In order to see the difference between a bank balance and cash book,and see whether cheques or deposit made all appear in the bank statement
just you have to make the balance equal of cash & pass book ie through econciling the transaction by entering into pass book which is not entered in cash book
What do we write in entry account heading in bank reconcilation statment " deposit not shown in bank "
bank prepares a bank statement ..one copy of bank statement is with us called cash book and other is with bank called pass book