Mark the items appearing in both the records. Compare the amount of each deposit recorded in the debit side of the bank column of the cashbook with credit side of the bank statement and credit side of the bank column with the debit side of the bank statement. Match the deposits in the business records with those in the bank statement. Once you’ve received it, follow these steps to reconcile a bank statement: 1. The statement also includes bank charges such as for account servicing fees. The statement itemizes the cash and other deposits made into the checking account of the business. You receive a bank statement, typically at the end of each month, from the bank. Bank Reconciliation: A Step-by-Step Guide To do this, a reconciliation statement known as the bank reconciliation statement is prepared. This is done to confirm every item is accounted for and the ending balances match. The business needs to identify the reasons for the discrepancy and reconcile the differences. The bank sends the account statement to its customers every month or at regular intervals. In the bank books, the deposits are recorded on the credit side while the withdrawals are recorded on the debit side. Similarly, the bank too keeps an account for every customer. The cash column in the cash book shows the available cash while the bank column shows the cash at the bank. To reconcile a bank statement, the account balance as reported by the bank is compared to the general ledger of a business.īusinesses maintain a cash book to record both bank transactions as well as cash transactions. If you need income tax advice please contact an accountant in your area. NOTE: FreshBooks Support team members are not certified income tax or accounting professionals and cannot provide advice in these areas, outside of supporting questions about FreshBooks. What Is the Purpose of Bank Reconciliation?.

How Often Should You Reconcile Your Bank Account?.What Are the Steps to Reconcile a Bank Statement?.To do a bank reconciliation you would match the cash balances on the balance sheet to the corresponding amount on your bank statement, determining the differences between the two in order to make changes to the accounting records, resolve any discrepancies and identify fraudulent transactions.

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