how to prepare bank reconciliation statement
Answers
It is very easy to prepare the bank reconciliation statement. While preparing the bank reconciliation statement the accountant has to go step by step. We are describing the various steps to be taken while preparing of bank reconciliation statement:-
First of all accountant must check that the opening balances of bank statement and bank book are matching with the balances as per last bank reconciliation statement.
All entries must be checked very carefully and ticked in bank statement and the bank book.
Pending entries in last bank reconciliation also must be checked and make sure that all the entries are ticked.
Then make the list of non-ticked entries on a separate piece of paper.
Now, to reconcile the balances of bank statement and bank book, the accountant has to take a base of one balance either as per bank statement or as per bank book. Here, we are taking the balance as per bank book as base balance and we are assuming that the balance as per bank book is debit balance.
Add the amount of cheques issued by us but not presented for payment.
Add the amount directly credited by the bank in our account.
Add the amount of cheque issued by us but dishonoured by bank.
Subtract the amount of cheques deposited by us but not cleared.
Subtract the amount of cheques deposited by us but dishonoured.
Subtract the amount which are debited directly in our account.
Add or subtract the amount if mistake in balancing either in bank statement or in bank book.
After making the above adjustments the balance must be equal to the balance as per bank statement or pass book.
Please note that in above case, we have taken the debit balance as per bank book. The position will be reversed if there is credit balance according to bank book i.e. the items which we are adding will be subtracted and the items which we are subtracting will be added.
The company prepares a bank reconciliation to determine its actual cash balance and prepare any entries. A bank statement is a record of your bank account transactions, typically for one month, prepared by the bank.