How to prepare Bank Reconciliation?

Bank reconciliation is one of the major accounting technique to reconcile the ledger with the bank's records. You may find it very difficult but the following tips will make your life happier within minutes.

Understand that there are two books in bank reconciliation.

1) Cash Ledger ( Company's record)

2) Bank Statement ( issued by company's bank)

In bank reconciliation, we try to match the amount of bank statement with our ledger or vice versa. The purpose of this is to make sure that all transactions posted or occurred are in the knowledge of the authorized personnel.

Format:

Balance as per Bank Statement ----------------------------xxxxxx

Add:

Deposit in transit xxxxxx

Bank Charges xxxxxx

Less:

Cheques not cleared yet (xxxxx)

Balance as per company's books xxxxxx