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what is meant by bank reconciliation statement?

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The bank balance taht is shown in the cash book and bank balance that is shown in the bank statement seldom agree. Periodically, therefore, a statement is prepared called bank reconciliation statement to find out the reasons for disagreement between the bank statement balance and the cash book balance of the bank, and to test whether the apparently conflicting balance do really agree.

Bank Reconciliation -

It Means A form that allows individuals to compare their personal bank account records to the bank's records of the individual's account balance in order to uncover any possible discrepancies.

The process of comparing and reconciling accounting records with the records presented on the bank statement. Sometimes disrepancies between the records might occur due to the timing differences when the data is recorded in the accounting and in the bank books. The purpose of bank reconciliation is to check whether the disrepancies are due to timing rather than error.

Bank Reconciliation Statement:

A bank reconciliation statement is a statement prepared by organizations to reconcile the balance of cash at bank in a company's own records with the bank statement on a particular date.

A form that allows individuals to compare their personal bank account records to the bank's records of the individual's account balance in order to uncover any possible discrepancies of the account holder.

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rocky

I am a MBA fresher please tell me how i can be technicaly sound in finance

i m a M.Com Person and i m fresher in accountant please tell me about bank reconciliation.........

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Originally Posted by Unregistered

what is meant by bank reconciliation statement?

Please reply

thanks

Bank Reconciliation Statement:

Learning Objectives:

Define and explain bank reconciliation statement.

What are the reasons of disagreement of the balances of cash book and bank statement.

Prepare the format of the statement.

Prepare bank reconciliation statement.

Definition and explanation

Causes of disagreement between cash book balance and bank statement balance

How to prepare a bank reconciliation statement

Example1

Example 2

Definition and Explanation:

From time to time the balance shown by the bank and cash column of the cash book required to be checked. The balance shown by the cash column of the cash book must agree with amount of cash in hand on that date. Thus reconciliation of the cash column is simple matter. If it does not agree it means that either some cash transactions have been omitted from the cash book or an amount of cash has been stolen or lost. The reason for the difference is ascertained and cash book can be corrected. So for as bank balance is concerned, its reconciliation is not so simple. The balance shown by the bank column of the cash book should always agree with the balance shown by the bank statement, because the bank statement is a copy of the customer's account in the banks ledger. But the bank balance as shown by the cash book and bank balance as shown by the bank statement seldom agree. Periodically, therefore, a statement is prepared called bank reconciliation statement to find out the reasons for disagreement between the bank statement balance and the cash book balance of the bank, and to test whether the apparently conflicting balance do really agree.

Causes of Disagreement Between Bank statement and Cash book:

Usually the reasons for the disagreement are:

That our banker might have allowed interest which have not yet been entered in our cash book.

That our banker might have debited our account for any such item as interest on overdraft, commission for collecting cheque, incidental charges etc., which we have not entered in the cash book.

That some of the cheque which we drew and for which we credited our bank account prior to the date of closing, were not presented at the bank and therefore, not debited in the bank statement.

That some cheques or drafts which we have paid into bank for collection and for which we debited our bank account, were not realised within the due date of closing and therefore, not credited by the bank.

The banker might have credited our account with amount of a bill of exchange or any other direct payment into bank and the same may not have been entered in the cash book.

That cheques dishonoured might have been debited in the bank statement but have not been given effect to in our books.

How to Prepare a Bank Reconciliation Statement:

To prepare the bank reconciliation statement, the following rules may be useful for the students:

Check the cash book receipts and payments against the bank statement.

Items not ticked on either side of the cash book will represent those which have not yet passed through the bank statement.

Make a list of these items.

Items not ticked on either side of the bank statement will represent those which have not yet been passed through the cash book.

Make a list of these items.

Adjust the cash book by recording therein those items which do not appear in it but which are found in the bank statement, thus computing the correct balance of the cash book.


Read more at http://accounting4management.com/bank_reconciliation_statement.htm#krBGppiTJYbdE03R .99

HI,

Meaning of Bank Reconciliation Statement-----------------

Bank Reconciliation Statement means is the method of
maintaining the balance in the accurate manner so that we
can able to check our availability of fund for the further
transactions.


Hope the information helps you,
all the best..............

Meaning of Bank Reconciliation Statement-----------------

Bank Reconciliation Statement means is the method of
maintaining the balance in the accurate manner so that we
can able to check our availability of fund for the further
transactions.


Hope the information helps you,
all the best..............