Bank reconciliation statement Watch

(Original post by queenfatso)
Hey guys,

I have an exam coming up and it's about cash reconciliation statements but I'm struggling to know the order.

Can you give some examples of what goes on the debit and credit side of the cash book?

Do we start with "balance per bank statement" or "balance per cash book" for the reconciliation statement?

And then "add" on what? Give examples
Then "less" what? Give examples
Then what do we end with?

Any help would be appreciated.

(Original post by DJKL)
A bank rec can be laid out any way one chooses , and I cannot tell you what is expected in an exam. The sort of layout I would go for is say like this:

Cashbook balance £42,500


Balance per bank statement £46,200

Add: outstanding lodgements
(in cashbook not cleared bank stat)
1,200
600
1,700

Less; outstanding cheques:
(in cashbook not cleared bank stat)

1,200
4,000
2,000

Total £42,500

All the bank rec does is acts as a check between what has gone through the bank statement and what is through the cashbook, the trouble is that entries in the cashbook may be yet to feature on the bank statement, so the rec records the timing differences and acts as a control check on what you have in your cashbook. It helps detect errors/confirm all transactions entered.

Be careful with signs when working with overdrawn bank accounts, just remember to be consistent.