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Bank Reconciliation

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What is Bank Reconciliation Statement?

Bank Reconciliation Statement is prepared to ensure that a company’s records as well as the bank’s records are correct.

The bank reconciliation process looks to ascertain if the discrepancy arising is caused due to error rather than timing.

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Factors affecting time gap:

Cheques issued by the bank but not yet presented for payment

Cheques deposited/bills discounted dishonoured

Cheques paid into the bank but not yet collected

Interest and dividends collected by the bank

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Differences caused by errors 

Errors committed in recording transaction by the company

Errors committed in recording transactions by the bank

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