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What is bank reconcialation?

Eric Morgan

in Student Loans

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Carlton Burgess on January 6, 2019

The bank reconciliation occurs when the personal bank record matches the balance shown in your account on the bank's records.

The bank statement ending balance probably do not agree with your accounting staff, and that is normal because when you issue a check that you subtract from your accounting staff, but it takes a day or two for the check to arrive at your bank, where it is subtracted from your account balance. The same delay happens with the deposits, also. Transactions in ATMS and other automatic debits occur almost immediately, and people often forget to write them down in your accounting staff.

So, look at the bank statement. Look to your accounting staff and place a check mark next to each item (in your book) for each item on the bank statement.

The Total of the unchecked items in your accounting book, both the checks and deposits, and then add (or subtract if the number is negative) by the amount of the final balance of the bank. The result of this mathematical step must be equal to the balance that you have on your accounting staff. (Most bank statements have a area in the back of the statement a list of cheques/deposits/ATM transactions that are cleared in your accounting staff. They provide step-by-step instructions for balancing, too.)

If it is not equal to the bank balance, then you may have forgotten to enter a check or a deposit, or you may have transposed a number. Keep working on it until there is a perfect balance!

It is good that you are learning how to do the balance of their personal accounts, because it will avoid overdraft fees by knowing your correct balance.


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