Bank Statement Balance Reconciling Items:
Deduct: Outstanding checks.
Add: Deposits in transit.
Add or Deduct: Bank accounting errors.
Book Balance Reconciling Items:
Deduct: Bank service charge.
Deduct: Nonsufficient funds check (NSF).
Add: Interest earned on checking accounts.
Add: Collections made by the bank.
Add or Deduct: Accounting Book errors.
Following these two steps to reconcile bank statements:
- Reconcile bank statement balance to the adjusted bank balance.
- Reconcile book balance to the adjusted book balance.
After a bank reconciliation the adjusted balances should be equal to each other. Accounting Software will often reconcile bank balances for accountants.
Definition of a Bank Statement
Canceled Checks and Bank Reconciliation Journal Entry
Accounting Bank Reconciliation Tutorial