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Bank Reconciliation Process Guide

This document summarizes the steps for preparing a bank reconciliation statement. It begins by explaining the differences between a bank statement and cash book that can cause discrepancies, such as transactions recorded by only one party. The main steps are: 1) treat errors, overdrafts and opening balances; 2) update the bank account; and 3) prepare the reconciliation statement. Key activities include ticking matching transactions, classifying errors, adjusting for errors on the correct sides of accounts, and ensuring the final balances per the bank statement and updated cash book agree.

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Nur Amira Nadia
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13 views9 pages

Bank Reconciliation Process Guide

This document summarizes the steps for preparing a bank reconciliation statement. It begins by explaining the differences between a bank statement and cash book that can cause discrepancies, such as transactions recorded by only one party. The main steps are: 1) treat errors, overdrafts and opening balances; 2) update the bank account; and 3) prepare the reconciliation statement. Key activities include ticking matching transactions, classifying errors, adjusting for errors on the correct sides of accounts, and ensuring the final balances per the bank statement and updated cash book agree.

Uploaded by

Nur Amira Nadia
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd

CHAPTER 8:

BANK RECONCILIATION
PREPARED BY: NURUL HASSANAH BINTI HAMZAH
DIFFERENCES BETWEEN BANK STATEMENT AND CASH BOOK
(BANK COLUMN)
DIFFERENCES BETWEEN BANK STATEMENT BALANCE & BANK
ACCOUNT BALANCE

Factors

Transactions Transactions
recorded by recorded by
the business the bank but Errors
but not by the not the
bank business

Uncredited
Standing Bank GIRO
Lodgement or Unpresented Bank service Interest Dishonored Errors made Errors made
Direct debit Instruction/Or Credit/Credit
Uncredited Cheques charge Revenue Cheque by the bank by the business
der Transfer
Cheques
STEPS TO PREPARE
BANK
RECONCILIATION

Step Treatment of errors, overdrafts


and opening balance &
1 disagreements

Step Updating the Bank Account


2

Step Prepare the Bank


3 Reconciliation Statement
1 2 3
Tick (√) the same transaction on the Classify the errors occur due to whom. Do the adjustments for each errors
same nature/side. Compare • If the errors made by the bank, then • If the errors occur due to posting to
• Cash book Dr (+) with Bank adjust it in the bank statement and the incorrect sides of an account,
Statement Cr (+) while compare vice versa you need to double the amount and
Cash book Cr (-) with Bank write in the correct sides.
Statement Dr(-). • Errors of transposition- adjust to the
correct figure on the same sides.

STEP 1: TREATMENT OF ERRORS, OVERDRAFTS AND OPENING BALANCE &


DISAGREEMENTS
Take the balance c/d in the bank account and write it as bal
Take b/d in opposite way

Write down all the untick figure from Bank Statement(BS)


STEP 2: Write down into Bank Account(BA)
UPDATING THE
BANK ACCOUNT
Adjust Adjust all the errors made by the business

REMEMBE REMEMBER we did this to get the balance as per updated


R bank account
1. Take the balance as per updated bank account
STEP 3: PREPARE from above step & insert it in the format as per
slides 5 above
THE BANK 2. REMEMBER if the balance as per updated
bank account (bal c/d) is on Dr side then you
RECONCILIATION need to put the –ve sign in this format and vice
versa.
STATEMENT 3. Write down all the untick figure from Bank
Account(BA) into Bank Statement(BS).
4. Adjust all the errors made by the bank.
5. We did this to get the balance as per bank
statement

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