The reconciled and adjusted cash book balance is reported in a company’s financial statements. Company A noted an ending balance of US$500,000 in its records, but its bank statement revealed an ending balance of US$540,000. Hence, Company A was able to make the necessary adjustments to its records by adding back the missing deposit and recording the cheque as an outstanding one. – Once all the necessary adjustments have been made, the final cash balance on the bank reconciliation statement of an entity ought to be equal to the ending balance of the same entity’s bank account.
Step #3: Work Out the Balance as Per Cash Book Side of the Bank Reconciliation Statement
Once you’ve figured out the reasons why your bank statement and your accounting records don’t match up, you need to record them. The balance recorded in your books (again, the cash account) and the balance in your bank account will rarely ever be exactly the same, even if you keep meticulous books. We’ll go over each step of the bank reconciliation process in more detail, but first—are your books up to date? If you’ve fallen behind on your bookkeeping, use our catch up bookkeeping guide to get back on track (or hire us to do your catch up bookkeeping for you).
