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Bank reconciliation


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statement of accounts

Published in: Economy & Finance
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Bank reconciliation

  2. 2. A Bank Reconciliation isa statement whichbrings into agreementthe cash balance perbook and cash balanceper bank.
  3. 3. Bank Reconciliation is usually prepared monthly because the bank provides the depositor with the bank statement at the end of every month.
  4. 4. Bank Statement is a monthly report of the bank to the depositor showing the cash balance per bank at the beginning, the deposits acknowledged, the checks paid, other charges and credits and daily cash balance per bank during the month.
  5. 5. Demand deposit – This is thecurrent account or checking account orcommercial deposit where deposits arecovered by deposit slips and wherefunds are withdrawable on demand bydrawing checks against the bank.  A demand deposit is noninterest bearing.
  6. 6. Saving deposit – The depositor is given a passbook upon the initial deposit. A saving deposit is interest bearing.
  7. 7. Time deposit – is evidenced, however, by a formal agreement embodied in an instrument. Time deposit may be preterminated or withdrawn on demand or after a certain period of time agreed upon.
  8. 8.  Credit Memos – refers to items not representing deposits credited by the bank to the account of the depositor but not yet recorded by the depositor as cash receipts.