Chapter 3.1: Bank reconciliation

Unrepresented cheques

Firm: Recorded in CPJ already (upon issue of cheque for payment)

Bank: Only reflected in bank statement if payee has banked in cheque.

→ Timing difference

Deposits not yet credited

Firm: Recorded in CRJ already (upon receipt of money/cheque)

Bank: Deposits on last day of month may only be reflected in the following month’s statement.

→ Timing difference

Direct credits

Firm: Not yet recorded in CRJ

Bank: Recorded deposit which will be reflected in bank statement.

Examples of direct credits

1. Interest earned

2. Direct remittances from debtors into bank a/c

Direct charges/debits

Firm: Not yet recorded in CPJ.

Bank: Recorded payments which will be reflected in bank statement.

Example of direct charges

1. Giro payments for bills

2. Cheque book fees

3. Bank charges and administration fee

Dishonoured cheques

Firm: Not yet updated (ie reverse out) by firm until it receives notice from bank that the cheque received previously has bounced back.

Bank: Reversed out deposit and reflected this in bank statement.

Errors

Firm: Will have to be adjusted in firm’s books.

Bank: Will be rectified in the following month’s bank statement.