BANKING AFFAIRS

Detailed explanation-1: -The reconciliation statement helps identify differences between the bank balance and the book balance to process necessary adjustments or corrections. An accountant typically processes reconciliation statements once per month.

Detailed explanation-2: -What Is Bank Reconciliation? In bank reconciliation, companies compare the balances and transactions on their external bank statements to the cash balances and transactions recorded in the cash accounts of their general ledger-the “cash books”.

Detailed explanation-3: -The adjusted bank balance amount is calculated by taking the amount entered in the Statement Ending Balance field in Reconcile Bank, adding all deposits in transit, subtracting or adding all adjustments, and subtracting all outstanding checks.

Detailed explanation-4: -Example #1: Cash Book Balance More Than Bank However, the balance as per cash book as on 31st march 2021 is $2210. A check of $500 was deposited, but it is not yet processed by the bank. Bank charges of $60 were recorded in the passbook, but not in the cash book. Checks worth $300 were issued, but not presented.

Detailed explanation-5: -Types of Account Reconciliation. Account reconciliations come in various forms and can be for personal or professional use. There are five primary types of account reconciliation: bank reconciliation, vendor reconciliation, business-specific reconciliation, intercompany reconciliation, and customer reconciliation.