BANK RECONCILIATION STATEMENT

BANK RECONCILIATION STATEMENT

Is a statement reconciling the balance show by cash book and balance shown by bank statement.

When money is paid into the bank the bank debts its cash book and credits customer’s account.

The costumer on the other hand debts all the money paid into the bank in his cash book and credit it with all payment he makes.

BANK STATEMENT

The bank supply his customer with the copy of a ledger account as it appear on banker book .

Is a statement which is prepared by the banker and sent to the customer showing all transaction that took place between customer and bank.

MAIN OBJECTIVE OF BANK RECONCILIATION STATEMENT

Is to find the cause of the difference between the two balances of the cash book and of the bank statement and to pass necessary correction or adjustment in the book of the firm

REASONS FOR DIS AGREEMENT BETWEEN BALANCE SHOWN IN THE BANK STATEMENT AND BALANCESHOWN IN THE CASH BOOK

1.   Cheque received but not paid into the bank: cheque received is entered into the cash book as soon as they are received however there may be a delay In sending a cheque to the bank to the bank and bank can not credit customer account until the cheque cleared if drawn from other bank. Thus cashbook wiil show bigger balance than the bank statement show.

2.   Cheque drawn and presented to the creditor but not yet presented to the for payment when cheque are issued by customer they are credited his cahs book but the bank make on entry until the cheque is presented for payment thus the bank shows a high balance in favor of the customer than what cash book shown.