Accounting › Section G · Fraud, internal controls, and cash › Topic G.5
Bank reconciliations
The bank statement and the company's Cash account almost never show the same balance on the same day. A bank reconciliation explains every difference, finds the entries the company still has to make, and is one of the most effective controls over cash.
In this topic
- Why the two balances differ
- Adjustments to the bank balance
- Adjustments to the book balance
- The procedure step by step
- Worked example: preparing the reconciliation
- Worked example: recording the book-side items
- Why NSF cheques go back to receivables
- Hunting for an unexplained difference
- The reconciliation as a control
- Common mistakes to avoid
- Key takeaways
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