Bank Reconciliation

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Information about Bank Reconciliation
Education

Published on September 23, 2008

Author: ashishnangla

Source: slideshare.net

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NAME : Neelesh Nanda

TOPIC : Bank Reconciliation

BATCH : 13 TH B

ROLL NO : KH08JUNMBA81

NAME : Neelesh Nanda TOPIC : Bank Reconciliation BATCH : 13 TH B ROLL NO : KH08JUNMBA81

NAME : Neelesh Nanda

TOPIC : Bank Reconciliation

BATCH : 13 TH B

ROLL NO : KH08JUNMBA81

Bank reconciliation is the process of matching and comparing figures from accounting records against those presented on a bank statement. The balance of the accounting ledger should match to the balance of the bank statement. B.R.S. helps accounting firm to have an accurate view and also ensure that the company's bookkeeping is good.

Reasons for difference between the two records Cheques drawn but not yet presented to the bank. Cheques received but not yet deposited in the bank. Interest credited and not recorded in the organization's books. Bank charges debited but not recorded in the organization's books

Cheques drawn but not yet presented to the bank.

Cheques received but not yet deposited in the bank.

Interest credited and not recorded in the organization's books.

Bank charges debited but not recorded in the organization's books

For example, cheques written near the end of August are deducted immediately on the company's books But those cheques will likely clear the bank account in early September Sometimes the bank decreases the company's bank account without informing the company of the amount Also bank service charge might be deducted on the bank statement on August 31, but the company will not learn of the amount until the company receives the bank statement in early September From these two examples, you can understand why there will likely be a difference in the balance on the bank statement vs. the balance in the Cash account on the company's books. It is also possible (perhaps likely) that neither balance is the true balance. Both balances may need adjustment in order to report the true amount of cash.

For example, cheques written near the end of August are deducted immediately on the company's books

But those cheques will likely clear the bank account in early September

Sometimes the bank decreases the company's bank account without informing the company of the amount

Also bank service charge might be deducted on the bank statement on August 31, but the company

will not learn of the amount until the company receives the bank statement in early September

From these two examples, you can understand why there will likely be a difference in the balance

on the bank statement vs. the balance in the Cash account on the company's books. It is also possible

(perhaps likely) that neither balance is the true balance. Both balances may need adjustment in order

to report the true amount of cash.

Advantages of BRS

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