What are the important things to be remembered while preparing a bank reconciliation statement?

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Ms Alam

Accounting and Taxation Expert

It should be cosidered whether the bank balance is correct or not and the date of recocilation should be same between bank book and bank statement, also cosidered the cheque in transit.
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While preparing a bank reconciliation statement following important points need to be remembered: * Bank Reconciliation Statement is prepared either by starting with the Bank pass book balance or Cash book balance. * If the balance of the Cash book is taken as a starting point then Cash book balance...
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While preparing a bank reconciliation statement following important points need to be remembered: * Bank Reconciliation Statement is prepared either by starting with the Bank pass book balance or Cash book balance. * If the balance of the Cash book is taken as a starting point then Cash book balance is to be adjusted in accordance with the entries passed in the Bank pass book and vice versa. For example: If the balance is taken as per the Cash book then the following items will be added: * Cheques issued but not presented for payment; * Amount credited in Passbook but not in Cash book; * Deposits made in the bank directly; * Wrong credits given by bank; * Interest credited in the Passbook. The following items will be subtracted: * Cheques deposited but not cleared; * Interest/Bank Charges debited by bank * Direct payments made by bank not entered in Cash book * Cheques dishonoured not recorded in cash book * Wrong debits given by bank * If it is prepared with the Bank balance as per the bank passbook, then the above procedure will be reversed i.e the items will be added to the pass book which were deducted from the cash book balance and those items will be deducted from the bank pass book balance which were added to the cash book balance. read less
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Conmerce Coaching

Students should be taught the logic behind adding & subtracting the amount from the given balance rather to only remember the + or - otherwise student may not be able to solve the tricky problems.
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B. Com( Hons), C.A (IPCC-Group-I), C.S Executive

Firstly, you need to understand that In cash book: Debit side records the money received by customer( increases the cash balance) and credit side records the payment ( decreases the cash balance). In bank pass book:Debit side records the money payments made by bank on behalf of customer( decreases...
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Firstly, you need to understand that In cash book: Debit side records the money received by customer( increases the cash balance) and credit side records the payment ( decreases the cash balance). In bank pass book:Debit side records the money payments made by bank on behalf of customer( decreases the bank balance) and credit side records the money received by bank on behalf of customer ( increases the bank balance). In cash book, Debit balance is favourable balance whereas in bank pass book Credit balance is unfavourable balance. In the given question, first understand which balance is given and which balance is to be arrived. Then, for each transaction you must see which balance is more. For eg: In the problem u have been given cash book balance and u are required to arrive at bank book balance. In that case if a transaction makes the cash book balance greater than bank pass book, then you should subtract.and if a transaction makes the cash book balance lesser than bank pass book then you should add that amount to cash book balance. read less
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