5 Bank reconciliation

statements

this chapter covers... this chapter covers...

The preparation of bank reconciliation statements requires a knowledge of:
■ bank statements - see page 69
■ simple cash book - covered in the unit for Processing Bookkeeping Transactions
The previous chapters have explained the various forms of receipts and payments that
may be shown on a business bank statement. The business cash book was covered in
Chapter 9 of Bookkeeping 1 Tutorial - for bank reconciliation statements it is the ability
to update a simple cash book from the bank statement, and to total and balance the cash
book, that is required.
The purpose of bank reconciliation statements is to form the link between the balance at
bank shown in the cash book of a business bookkeeping system and the balance shown
on the bank statement received from the bank.
The reasons why the cash book and bank statement may differ - and need reconciling -
are because:
■ there are timing differences caused by:
- unpresented cheques, ie the time delay between the business writing out a
cheque and recording it in the cash book, and the cheque being entered by
the bank on the bank statement
- outstanding lodgements, ie amounts paid into the bank by the business, but
not yet recorded on the bank statement
■ the cash book has not been updated with items which appear on the bank
statement and which should also appear in the cash book such as direct debits,
standing orders and bank charges
Assuming that there are no errors and both cash book and bank statement are correct,
the two documents need to be reconciled with each other, ie their closing balances need
to be agreed by means of a calculation known as a bank reconciliation statement.
 bank reconciliation statements 77

R E C E I V I N G T H E B A N K S TAT E M E N T

When the bank statement is received it must be matched or compared with

the cash book in order to identify any differences or discrepancies.
These differences are:
■ timing differences
■ updating items for the cash book

timing differences
The two main timing differences or discrepancies between the bank columns
of the cash book and the bank statement are:
■ unpresented cheques, ie cheques issued, not yet recorded on the bank
statement
■ outstanding lodgements, ie amounts paid into the bank, not yet recorded
on the bank statement
The first of these – unpresented cheques – is caused because, when a
cheque is written out, it is immediately entered on the payments side of the
cash book, even though it may be some days before the cheque passes
through the bank clearing system and is recorded on the bank statement.
Therefore, for a few days at least, the cash book shows a lower balance than
the bank statement in respect of this cheque. When the cheque is recorded on
the bank statement, the difference will disappear. We have looked at only
one cheque here, but a business will often be issuing several cheques each
day, and the difference between the cash book balance and the bank
statement balance may be considerable.
With the second timing difference – outstanding lodgements – the
business’s cashier will record a receipt in the cash book as he or she prepares
the bank paying-in slip. However, the receipt may not be recorded by the
bank on the bank statement for a day or so, particularly if it is paid in late in
the day, or if it is paid in at a bank branch other than the one at which the
account is maintained.
Until the receipt is recorded by the bank the cash book will show a higher
bank account balance than the bank statement. Once the receipt is entered on
the bank statement, the difference will disappear.
These two timing differences are involved in the calculation known as the
bank reconciliation statement. The business cash book must not be altered
because, as we have seen, they will correct themselves on the bank statement
as time goes by.
78 bookkeeping 2 tutorial

updating items for the cash book

Besides the timing differences described on the previous page, there may be
other differences between the bank columns of the cash book and the bank
statement, and these do need to be entered in the cash book to bring it up-to-
date.
For example, the bank might make an automatic standing order payment on
behalf of a business – such an item is correctly deducted by the bank, and it
might be that the bank statement acts as a reminder to the business cashier of
the payment: it should then be entered in the cash book.
Examples of items that show in the bank statement and need to be entered in
the cash book include:

receipts - money in
■ credit transfers (BACS – Bankers Automated Clearing Services) amounts
received by the bank, eg payments from trade receivables
■ dividend amounts received by the bank
■ bank interest received

payments - money out

■ standing order and direct debit payments (many businesses keep
schedules of their standing orders and direct debits – from these they
write up the cash book as the payments fall due)
■ bank charges and interest
■ unpaid cheques deducted by the bank, for example, cheques from
customers paid in by the business which have ‘bounced’ and are returned
by the bank marked ‘refer to drawer’
For each of these items, the cashier needs to check to see if they have been
entered in the cash book; if not, they need to be recorded (provided that the
bank has not made an error). If the bank has made an error, it must be notified
as soon as possible and the incorrect transactions reversed by the bank in its
own accounting records.

T H E B A N K R E C O N C I L I AT I O N S TAT E M E N T

The bank reconciliation statement forms the link between the balances
shown in the bank statement and in the cash book:
 bank reconciliation statements 79

bank statement

bank reconciliation statement

cash book (bank columns)

Upon receipt of a bank statement, reconciliation of the two balances is

carried out in the following way:
■ tick off the items that appear in both cash book and bank statement
■ the unticked items on the bank statement are entered into the bank
columns of the cash book to bring it up-to-date (provided none are errors
made by the bank)
■ the bank columns of the cash book are now balanced to find the revised
figure
■ the remaining unticked items from the cash book will be the timing
differences
■ the timing differences are used to prepare the bank reconciliation
statement, which takes the following format (with example figures):

XYZ TRADING LIMITED

Bank Reconciliation Statement as at 31 October 20-1

£ £

Balance at bank as per bank statement 245

Less: unpresented cheques

J Lewis cheque no 0012378 60
ABC Limited cheque no 0012392 100
Eastern Oil Company cheque no 0012407 80
240
5
Add: outstanding lodgements 220
300
520
Balance at bank as per cash book 525
80 bookkeeping 2 tutorial

Notes:
■ The layout shown above starts from the bank statement balance, and
works towards the cash book balance. A common variation of this layout
is to start with the cash book balance and to work towards the bank
statement balance (see page 84).
■ If a bank overdraft is involved, brackets should be used around the
numbers to indicate this for the bank statement or cash book balance. The
timing differences are still added or deducted, as appropriate.
■ Once the bank reconciliation statement agrees, it should be filed because
it proves that the bank statement and cash book were reconciled at a
particular date. If, next time it is prepared, it fails to agree, the previous
statement is proof that reconciliation was reached at that time.

B A N K R E C O N C I L I AT I O N S TAT E m E N T
Case
Study

situation
The cashier of Severn Trading Company has written up the business’s cash book
for the month of February 20-1, as shown below.

Note that the cheque number is shown against payments.

Dr Cash Book Cr

Date Details Cash Bank Date Details Cash Bank

20-1 £ £ 20-1 £ £
2 Feb Balances b/d 250.75 1,340.50 3 Feb Appleton Ltd 123456 675.25
6 Feb A Abbott 208.50 5 Feb Wages 58.60
10 Feb Sales 145.25 12 Feb Rent 123457 125.00
16 Feb Sales 278.30 17  Feb D Smith & Co 123458 421.80
20 Feb Sales 204.35 24 Feb Stationery 75.50
23 Feb D Richards Ltd 162.30 25 Feb G Christie 123459 797.55
26 Feb Sales 353.95 Balances c/d 466.25 586.25
27 Feb P Paul Ltd 262.30

600.35 2,605.85 600.35 2,605.85

Balances b/d 466.25 586.25

The cash balance of £466.25 shown by the cash columns at the month-end has been
agreed with the cash held in the cash box. The bank statement for February 20-1 has
just been received:
 bank reconciliation statements 81

National Bank plc Account title Severn Trading

Bartown Branch Company

Account number 67812318

Statement 45

Date Details Payments Receipts Balance

20-1 £ £ £
2 Feb Balance brought forward 1340.50 Cr
7 Feb Credit 208.50 1549.00 Cr
10 Feb Cheque 123456 675.25 873.75 Cr
17 Feb Credit 278.30 1152.05 Cr
17 Feb Cheque 123457 125.00 1027.05 Cr
24 Feb Credit 162.30 1189.35 Cr
24 Feb BACS J Jarvis Ltd 100.00 1289.35 Cr
26 Feb Cheque 123458 421.80 867.55 Cr
26 Feb Direct debit A-Z Finance 150.00 717.55 Cr
27 Feb Credit 353.95 1071.50 Cr
27 Feb Bank charges 10.00 1061.50 Cr

solution
Note that the bank statement is prepared from the bank’s viewpoint: thus a credit
balance shows that the customer is a payable of the bank, ie the bank owes the
balance to the customer. In the customer’s own cash book, the bank is shown as a
debit balance, ie an asset.
As the month-end balance at bank shown by the cash book, £586.25, is not the same
as that shown by the bank statement, £1,061.50, it is necessary to compare individual
items in the cash book and on the bank statement for accuracy. The steps are:

1 Tick off the items that appear in both cash book and bank statement.

2 The unticked items on the bank statement are entered into the bank columns of
the cash book to bring it up-to-date. These are:

• receipt 24 Feb BACS credit, J Jarvis Limited £100.00

• payments 26 Feb Direct debit, A-Z Finance £150.00

27 Feb Bank Charges, £10.00

In double-entry bookkeeping, the other part of the transaction will need to be

recorded in the accounts.
82 bookkeeping 2 tutorial

3 The cash book is now balanced to find the revised balance:

Dr Cash Book (bank columns) Cr

20-1 £ 20-1 £
Balance b/d 586.25 26 Feb A-Z Finance 150.00
24 Feb J Jarvis Ltd 100.00 27 Feb Bank Charges 10.00
28 Feb Balance c/d 526.25
686.25 686.25
1 mar Balance b/d 526.25

4 The remaining unticked items from the cash book are:

• receipt 27 Feb – P Paul Limited £262.30

• payment 25 Feb – G Christie (cheque no 123459) £797.55

These items are timing differences, which should appear on next month’s bank
statement. They will be used in the bank reconciliation statement.

5 The bank reconciliation statement is now prepared, starting with the bank
statement balance of £1,061.50 and using the unticked items from the cash
book which were noted above.

SEVERN TRADING COMPANY

Bank Reconciliation Statement as at 28 February 20-1
£
Balance at bank as per bank statement 1,061.50
Less: unpresented cheque, no 123459 797.55
263.95
Add: outstanding lodgement, P Paul Limited 262.30
Balance at bank as per cash book 526.25

This bank reconciliation statement starts with the bank statement balance, and
finishes with the amended balance from the cash book, ie the two figures are
reconciled.

notes on the case study

• The unpresented cheque is deducted from the bank statement balance because,
until it is recorded by the bank, the bank statement shows a higher balance than
the cash book.

• The outstanding lodgement is added to the bank statement balance because, until
it is recorded by the bank, the bank statement shows a lower balance than the cash
book.
 bank reconciliation statements 83

P R E PA R I N G A B A N K R E C O N C I L I AT I O N S TAT E M E N T

In order to help with the Activities at the end of the chapter, here is a step-
by-step summary of the procedure. Reconciliation of the bank statement
balance with that shown in the cash book should be carried out in the
following way:

1 From the bank columns of the cash book tick off, in both cash book and
bank statement, the receipts that appear in both.

2 From the bank columns of the cash book tick off, in both cash book and
bank statement, the payments that appear in both.

3 Identify the items that are unticked on the bank statement and enter them
in the cash book on the debit or credit side, as appropriate. (If, however,
the bank has made a mistake and debited or credited an amount in error,
this should not be entered in the cash book, but should be notified to the
bank for them to make the correction. The amount will need to be entered
on the bank reconciliation statement.)

4 The bank columns of the cash book are now balanced to find the up-to-
date balance.

5 Start the bank reconciliation statement with the final balance figure
shown on the bank statement.

6 In the bank reconciliation statement deduct the unticked payments shown

in the cash book – these will be unpresented cheques.

7 In the bank reconciliation statement, add the unticked receipts shown in

the cash book – these are outstanding lodgements.

8 The resulting money amount shown on the bank reconciliation statement

is the balance at bank as per the cash book.

The layout which is often used for the bank reconciliation statement is that
shown in the Case Study on the previous page. The layout starts with the
bank statement balance and finishes with the cash book balance. However,
there is no reason why it should not commence with the cash book balance
and finish with the bank statement balance: with this layout it is necessary
to:
■ add unpresented cheques
■ deduct outstanding lodgements

The bank reconciliation statement of Severn Trading Company would then

appear as (see the next page):
84 bookkeeping 2 tutorial

SEVERN TRADING COMPANY

Bank Reconciliation Statement as at 28 February 20-1
£
Balance at bank as per cash book 526.25
Add: unpresented cheque, no 123459 797.55
1,323.80
Less: outstanding lodgement, P Paul Limited 262.30
Balance at bank as per bank statement 1,061.50

D E A L I N G W I T H U N U S U A L I T E M S O N B A N K S TAT E M E N T S

The following are some of the unusual features that may occur on bank
statements. As with other accounting discrepancies, where they cannot be
resolved they should be referred to the accounts supervisor for guidance.
out-of-date cheques
These are cheques that are more than six months old. The bank will not pay
such cheques, so they can be written back in the cash book, ie debit cash
book (and credit the other double-entry account involved).
returned (dishonoured) cheques
A cheque received by a business is entered as a receipt in the cash book and
then paid into the bank, but it may be returned (‘bounced’) by the drawer’s
(issuer’s) bank to the payee’s bank because:
■ the drawer (the issuer) has stopped it
■ the cheque has been returned by the bank, either because the drawer has
no money (a ‘dishonoured’ cheque) or because there is a technical
problem with the cheque, eg it is not signed
A cheque returned in this way should be entered in the bookkeeping system:
■ as a payment in the cash book on the credit side, and
■ – either as a debit to sales ledger control account (if it is a credit sale),
and a debit to the trade receivable’s account in sales ledger
– or as a debit to sales account (if it is a cash sale)
bank errors
Errors made by the bank can include:
■ a cheque deducted from the bank account which has not been issued
by the business – look for a cheque number on the bank statement that
is different from the current cheque series: take care, though, as it could
be a cheque from an old cheque book
 bank reconciliation statements 85

■ a BACS receipt shown on the bank statement for which the business
is not the correct recipient; if in doubt, the bank will be able to give
further details of the sender of the money
■ standing orders and direct debits paid at the wrong time or for the
wrong amounts; a copy of all standing order and direct debit mandates
sent to the bank should be kept by the business for reference purposes,
standing order and direct debit schedules should be kept up-to-date so
that the cash book can be written up as the payments fall due
When an error is found, it should be queried immediately with the bank. The
item and amount should not be entered in the business’s cash book until it
has been resolved. If, in the meantime, a bank reconciliation statement is to
be prepared, the bank error should be shown separately. When the
reconciliation is from the bank statement balance to the cash book balance,
add payments and deduct receipts that the bank has applied to the account
incorrectly.

bank interest received

For certain types of accounts banks may pay interest to their customers.
When this happens the bank statement of the customer shows a receipt for
‘interest received’ or ‘bank interest received’.

bank charges and interest paid

From time-to-time banks charge customers’ accounts with an amount for:
– service charges, ie the cost of operating the bank account
– interest paid, ie the borrowing cost when the bank account is
overdrawn
On a bank statement, such items are shown in the ‘payments’ or ‘paid out’
column.

R E C O N C I L I AT I O N O F O P E N I N G C A S H B O O K A N D B A N K
S TAT E M E N T B A L A N C E S

If you look back to the Case Study on pages 80-82, you will see that both the
cash book (bank columns) and the bank statement balance both started the
month with the same balance: 1 February 20-1 £1,340.50.
In reality, it is unlikely that the opening cash book and bank statement
balances will be the same. It will be necessary, in these circumstances, to
prepare a simple opening bank reconciliation statement in order to prove that
there are no errors between cash book and bank statement at the start of the
month.
86 bookkeeping 2 tutorial

This is set out in the same format as the end-of-month bank reconciliation
statement, and is best prepared immediately after ticking off the items that
appear in both cash book and bank statement. The earliest unpresented
cheques drawn and outstanding lodgements will, most probably, be causing
the difference. Of course, where last month’s bank reconciliation statement
is available, such as in business, there is no need to prepare an opening
reconciliation.
There is usually no need to prepare a formal opening bank reconciliation
statement as any discrepancy in opening balances can be resolved quickly by
checking the bank statement for the earliest receipts and payments.

I M P O R TA N C E O F B A N K R E C O N C I L I AT I O N S TAT E M E N T S

■ A bank reconciliation statement is important because, in its preparation,

the transactions in the bank columns of the cash book are compared with
those recorded on the bank statement. In this way, any errors in the cash
book or bank statement will be found and can be corrected (or advised to
the bank, if the bank statement is wrong).
■ The bank statement is an independent accounting record, therefore it will
assist in deterring fraud by providing a means of verifying the cash book
balance.
■ By writing the cash book up-to-date, the business has an amended figure
for the bank balance to be shown in the trial balance.
■ It is good business practice to prepare a bank reconciliation statement
each time a bank statement is received. The reconciliation statement
should be prepared as quickly as possible so that any queries – either with
the bank statement or in the cash book – can be resolved. Many
businesses will specify to their accounting staff the timescales for
preparing bank reconciliation statements – as a guideline, if the bank
statement is received weekly, then the reconciliation statement should be
prepared within five working days.

■ The purpose of a bank reconciliation statement is to reconcile the balance

shown by the bank statement with that shown by the bank columns of the
Chapter

cash book.
Summary

■ Certain differences between the two are timing differences. The main timing
differences are:
– unpresented cheques
– outstanding lodgements
These differences will be corrected by time and, most probably, will be
recorded on the next bank statement.
 bank reconciliation statements 87

■ Certain differences appearing on the bank statement need to be entered in

the cash book to bring it up-to-date. These include:
Receipts – credit transfer (BACS) amounts received by the bank
– dividend amounts received by the bank
– bank interest
Payments – standing order and direct debit payments
– bank charges and interest
– unpaid cheques debited by the bank

■ The bank reconciliation statement makes use of the timing differences.

■ Once prepared, a bank reconciliation statement is proof that the bank

statement and the cash book (bank columns) were agreed at a particular
date.

Key bank reconciliation statement forms the link between the balances shown
Terms in the bank statement and the cash book

timing differences discrepancies between the bank statement

and the cash book that will be corrected over
time, such as unpresented cheques and
outstanding lodgements

unpresented cheques cheques drawn, but not yet recorded on the

bank statement

outstanding lodgements amounts paid into the bank, but not yet
recorded on the bank statement

direct debit/standing lists of direct debit and standing order

order schedules payments, kept by a business, from which the
cash book is written up as payments fall due
88 bookkeeping 2 tutorial

Activities

5.1 When preparing a bank reconciliation statement, which one of the following is a timing difference?
(a) unpresented cheques
(b) direct debit payments
(c) bank charges and interest
(d) BACS receipts
Answer (a) or (b) or (c) or (d)

5.2 A business’s bank statement shows a balance of £400 in the bank. Unpresented cheques total
£350; outstanding lodgements total £200. What is the balance at bank shown by the cash book?
(a) £100 credit
(b) £200 debit
(c) £250 debit
(d) £400 debit
Answer (a) or (b) or (c) or (d)

5.3 The bank columns of Tom Reid's cash book for December 20-2 are as follows:

20-2 Receipts £ 20-2 Payments £

1 Dec Balance b/d 280 9 Dec W Smith 345123 40
13 Dec P Jones 30 13 Dec Rent 345124 50
17 Dec H Homer 72 16 Dec Wages 345125 85
29 Dec J Hill 13 20 Dec B Kay 345126 20
31 Dec Balance c/d 200
395 395
 bank reconciliation statements 89

He then received his bank statement which showed the following transactions for December 20-2:

BANK STATEMENT
Payments Receipts Balance
20-2 £ £ £
1 Dec Balance brought forward 280 CR
13 Dec Credit 30 310 CR
15 Dec Cheque no 345123 40 270 CR
17 Dec Cheque no 345124 50 220 CR
22 Dec Credit 72 292 CR
23 Dec Cheque no 345125 85 207 CR

You are to prepare a bank reconciliation statement which agrees the bank statement balance with
the cash book balance.

5.4 The bank columns of P Gerrard's cash book for January 20-3 are as follows:

20-3 Receipts £ 20-3 Payments £

1 Jan Balance b/d 800.50 2 Jan A Arthur Ltd 001351 100.00
6 Jan J Baker 495.60 9 Jan C Curtis 001352 398.50
30 Jan G Shotton Ltd 335.75 13 Jan Donald & Co 001353 229.70
14 Jan Bryant & Sons 001354 312.00
23 Jan P Reid 001355 176.50

He received his bank statement which showed the following transactions for January 20-3:

BANK STATEMENT
Payments Receipts Balance
20-3 £ £ £
1 Jan Balance brought forward 800.50 CR
6 Jan Cheque no 001351 100.00 700.50 CR
6 Jan Credit 495.60 1,196.10 CR
13 Jan BACS credit: T K Supplies 716.50 1,912.60 CR
20 Jan Cheque no 001352 398.50 1,514.10 CR
23 Jan Direct debit: Omni Finance 207.95 1,306.15 CR
26 Jan Cheque no 001353 229.70 1,076.45 CR
31 Jan Bank interest 5.50 1,081.95 CR
90 bookkeeping 2 tutorial

You are to:

(a) check the items on the bank statement against the items in the cash book and update the
cash book accordingly; total the cash book and show the balance carried down at 31 January
20-3
(b) prepare a bank reconciliation statement at 31 January 20-3 which agrees the bank statement
balance with the cash book balance

5.5 The bank columns of Jane Doyle's cash book for may 20-4 are as follows:

20-4 Receipts £ 20-4 Payments £

1 may Balance b/d 300 3 may P Stone 867714 28
7 may Cash 162 14 may Alpha Ltd 867715 50
17 may C Brewster 89 28 may E Deakin 867716 110
27 may Cash 60
28 may Cash 40

She received her bank statement which showed the following transactions for may 20-4:

BANK STATEMENT
Payments Receipts Balance
20-4 £ £ £
1 may Balance brought forward 400 CR
2 may Cheque no 867713 100 300 CR
5 may Cheque no 867714 28 272 CR
7 may Credit 162 434 CR
17 may Standing order: A-Z Insurance 25 409 CR
19 may Credit 89 498 CR
20 may Cheque no 867715 50 448 CR
27 may Credit 60 508 CR
31 may Bank Charges 10 498 CR

You are to:

(a) write the cash book up-to-date at 31 may 20-4, and show the balance carried down
(b) prepare a bank reconciliation statement at 31 may 20-4 which agrees the bank statement
balance with the cash book balance
 bank reconciliation statements 91

5.6 On 4 June milestone motors received a bank statement which showed the following transactions
for may 20-5:

BANK STATEMENT
Paid out Paid in Balance
20-5 £ £ £
1 may Balance brought forward 3,802 C
2 may Cheque no 451761 150 3,652 C
10 may Cheque no 451762 751 2,901 C
11 may Cheque no 451763 268 2,633 C
13 may Cheque no 451765 1,045 1,588 C
14 may BACS credit: Perran Taxis 2,596 4,184 C
18 may Direct debit: Wyvern Council 198 3,986 C
20 may Direct debit: A1 Insurance 1,005 2,981 C
25 may Direct debit: Okaro and Company 254 2,727 C
25 may Bank charges 20 2,707 C

D = Debit C = Credit

The cash book of milestone motors as at 31 may 20-5 is shown below:

CASH BOOK
Date Details Bank Date Cheque no Details Bank
20-5 £ 20-5 £
1 may Balance b/f 3,652 4 may 451762 Smith and Company 751
26 may J Ackland 832 4 may 451763 Bryant Limited 268
28 may Stamp Limited 1,119 7 may 451764 Curtis Cars 1,895
7 may 451765 Parts Supplies 1,045

You are to:

(a) check the items on the bank statement against the items in the cash book
(b) update the cash book as needed
(c) total the cash book and show clearly the balance carried down at 31 may and brought down
at 1 June
(d) prepare a bank reconciliation statement at 31 may 20-5 which agrees the bank statement
balance with the cash book balance
92 bookkeeping 2 tutorial

5.7 On 30 June Durning Trading received a bank statement as at 27 June 20-8:

BANK STATEMENT
Paid out Paid in Balance
20-8 £ £ £
1 Jun Balance brought forward 768 C
4 Jun Cheque 364125 427 341 C
5 Jun BACS credit: Asif Ltd 1,122 1,463 C
18 Jun Cheque 364127 4,200 2,737 D
20 Jun Direct debit: JC Property Co 850 3,587 D
23 Jun BACS credit: Sand & Stone 2,486 1,101 D
26 Jun BACS credit: Surfrider Ltd 4,110 3,009 C
27 Jun Direct debit: Vord Finance 275 2,734 C
27 Jun Cheque 364128 1,062 1,672 C

D = Debit C = Credit

The cash book of Durning Trading as at 27 June 20-8 is shown below:

CASH BOOK
Date Details Bank Date Cheque no Details Bank
20-8 £ 20-8 £

1 Jun Balance b/d 1,890 1 Jun 364125 Penryn Ltd 427

20 Jun Chiverton Ltd 1,200 3 Jun 364126 Fal Boats 760

24 Jun Perran Ltd 4,750 10 Jun 364127 S mawes 4,200

24 Jun P Porth 8,950 20 Jun 364128 Castle Supplies 1,062

You are to:

(a) check the items on the bank statement against the items in the cash book
(b) update the cash book as needed
(c) total the cash book and clearly show the balance carried down at 27 June and brought down
at 28 June
 bank reconciliation statements 93

(d) using the form below, prepare a bank reconciliation statement as at 27 June which agrees
the bank statement balance with the cash book balance (note: not all the lines may be
needed)

Bank reconciliation statement as at 27 June 20-8

Balance as per bank statement £

Add

Name: £

Name: £

Name: £

Name: £

Total to add £

Less

Name: £

Name: £

Name: £

Name: £

Total to subtract £

Balance as per cash book £