Payments on bank statement not in the cash book.Receipts on bank statement not in the cash book.Payments in the cash book not on bank statement.Receipts in the cash book not on bank statement.Any differences between the cash book and the bank statement therefore fall into one of these types. The bank reconciliation statement format is determined by the fact that there are only three types of entry in the cash book and bank statement, which are receipts, payments, and errors.
If the two balances do not reconcile then either there is a mistake in the preparation of the bank reconciliation accounting or there are errors in the cash book or errors on the bank statement which then need to be investigated. The point of the bank reconciliations is to record these known timing differences and attempt to reconcile the bank statement balance to the cash book balance. These checks are normally referred to as unpresented checks. The period of days between the business posting the check and the bank posting the check results in items in the cash book not on the bank statement. The check then passes through the banking system and eventually, a few more days later, it is processed by the bank of the business and posted to its account (bank statement). The supplier will receive the check days later, and send it on to its bank. Most differences highlighted by the bank reconciliation procedure are due to timing differences as one organisation may have posted an item which the other has not.įor example, if a business writes a check, it will post it to its cash book that day and then send it on to its supplier. The purpose of the bank reconciliation exercise is to highlight the differences between what the bank has recorded and what the business has recorded, in this way it can act as an independent check on the business records. The reconciliation should be prepared on a regular basis (daily, weekly or monthly) dependent on the size of the firm and how many transactions are being processed through the cash book. The bank reconciliation is prepared as a statement called the Bank Reconciliation Statement (not to be confused with the bank statement which you received from the bank). The bank reconciliation process is a means of ensuring that the cash book of the business is reconciled to the bank statement provided by the bank.
0 kommentar(er)
