How to prepare a bank reconciliation statement?

by admin on December 22, 2011

How to prepare a bank reconciliation statement?, 5.3 out of 10 based on 65 ratings
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Can u give an example of illustrstion & solution.



+Admin


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{ 7 Answers… read them below or add one }

lisa December 22, 2011 at 3:40 pm

To Prepare a Bank Reconciliation Statement
(a) Compare transactions that appear on both Cash Book and Bank Statement
(b) Update Cash Book from details of transactions appearing on Bank Statement
(c) Balance the bank columns of the Cash Book to calculate the revised balance
5
Complete a Bank Reconciliation Statement
(a) Enter correct date of the statement
(b) Enter the balance at bank as per the Cash Book
(c) Enter details of unpresented cheques
(d) Enter sub-total on reconciliation statement
(e) Enter details of bank lodgements
(f) Calculate balance as per Bank Statement
Page 2
THE NEED FOR AN ACCURATE CASH BOOK
Most organisations keep a record of their cash and bank transactions in a
cash book (see Chapter 13). The cash book contains a record of both the cash
account and the bank account and shows the balance in each account at the
end of a period. Once the cash book has been balanced off it is usual to check
the details with the records of the firm’s bank transactions as recorded by the
bank.
To enable this check to be made the cashier will need to ensure that the cash
book is completely up-to-date and a recent bank statement has been obtained
from the bank.
Often,when a comparison is made between the bank balance as shown in the
firm’s cash book with that shown on the bank statement, the two balances
will be different. It is for this reason that a bank reconciliation statement
is prepared to reconcile (‘tally up’) the two balances. The reconciliation may
identify errors that may have been made in either the firm’s cash book or in
the bank’s records. Any corrections can then be made.
An example of a bank reconciliation statement is shown below. As you can
see, it is a very simple calculation. The process of drawing up a bank
reconciliation statement will be explained in full on pages xx-xx.

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sweetheart December 22, 2011 at 3:40 pm

go through some accounting books u’ll get some important info abt BRS

Reply

Simy December 22, 2011 at 3:40 pm
warennie December 22, 2011 at 3:40 pm

A bank reconciliation statement is to keep your bank statements in balance with your books. I’ve only studied this for a short while and im no expert, but in its simplest for you need to have two coloums, your closing bank balance and your closing books balance at one date (end of month in question). Then you need to correct each of them for any differences. Add interest earned to your books, minus no-sufficient fund cheque to books (and anything else that will account for the difference in balances. Then to your bank side, you need to add cheque’s in transfer and anything else that due to the time lag between the statements creation and the end of the books has not been included. Then you tally up all the coloums, and the balances in both books and bank should balance. If not you have not accounted for any differences. I hope you were asking for a very simple illustration and not planning on presenting your boss with a real life bank reconsilition :)

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Hsenid K December 22, 2011 at 3:40 pm

you should have cashbook and passbook of the client and then you should see the difference between the books and you should add or subract to tally .

Reply

Muhire Gosbert July 19, 2013 at 4:20 pm

you have tried to outline procedures to follow when preparing bank reconciliation but also you should try to provide certain example showing both cash book and bank records as par bank, hoping that could help a learner to get areal picture of this sub topic. Thank you.

Reply

Ellen Shikoyeni August 29, 2013 at 3:25 pm

I am stuck i need your assistance

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