Worlds Bank Reconciliation

BANK WORLDS RECONCILIATION : Bank reconciliation is a comparison of the general account at a bank on behalf of the Company by a statement from the bankers of the society at large end of the month sent occupied. It could, by the end of the month, each time after the date the accounting firm of the closure. The bank reconciliation prepared, elements that are missing or not properly treated in the two account found.

The common differences and their treatment are:

Each month the bank charges bank usually charges for the operation of the bank account. These fees are generally not up to the final end of the month published. By agreement, the bank can enforce a subscription to the loan interest, so that the repayment of the loan amount can not forget to register in the general ledger.

To correct this omission [. Debit bank charges, interest, etc., and credit the bank account in the ledger]

Deposits in transit: It is a time delay is due to the fact that the deposits were not near the end of the month written by the bank when the deposit arrived after the end of the month. No entry in the ledger is essential for this position.

These checks are outstanding checks that were issued in a given month, but not yet redeemed by the recipient at the end of the month or the end. No entry in the ledger is essential for this position.

Checks issued and then canceled These are controls which are lost by the receiver declared. The accountant called the bank and stopped payment but not the entry in the ledger.

Accounting entry: If the bank account to which the check was credited at the time of payment and debit the appropriate expense account, thus reversing the charge.

The loan will be issued by the bank can get a loan from the bank to be approved can be exciting. After the excitement of everyone forgets to save the entry in the ledger. To correct this omission, bank debits the account ledger to represent to the amount of credit, credit the loan account relevant determining liability.

The above list of reconciling items is not exhaustive but provides some of the items that require adjustments at the end.

The construction of reconciliation:

With the above elements, conciliation is prepared as follows:

Balance per bank statement to ...... 2011 ... say, $ 220,000

Add:
Deposits in transit, say 30 000

Less:
Cheques issued but not yet paid (35,000)

Reconciled bank statement balance of $ 215,000

General ledger bank account balance 111 200

Add: Bank loans received 100 000

Check issued in 4000 and then canceled

Less: Bank charges (200)

General Ledger Bank $ 215,000

The above statement shows that the account balance at the end of the period $ 215,000 correct, the residual amount after adjusting journal entries to bank loans, to check record cancellation fee and the bank were displayed in the correct reporting period. The bank statement shows currently $ 220,000 $ 30,000 deposit is due is not paid by the bank and $ 35,000 checks were not paid to the beneficiaries.