Bank reconciliation

Deposits in transit (outstanding deposits)
Bank Side of the Reconciliation

You have recorded these deposits, but the bank has not. Add deposits in transit on the bank reconciliation.

Outstanding cheques

Bank Side of the Reconciliation

You have recorded these cheques, but the payees have not yet cashed them. Subtract outstanding cheques.

Bank errors

Bank Side of the Reconciliation

Correct all bank errors on the Bank side of the reconciliation. For example, the bank may erroneously subtract from your account a cheque written by someone else.

Bank collections

Book Side of the Reconciliation

Bank collections are cash receipts that the bank has recorded for your account. But you haven’t recorded the cash receipt yet. An example is a bank collecting an account or note receivable for you. Add bank collections on the bank reconciliation.

Electronic funds transfers

Book Side of the Reconciliation

The bank may receive or pay cash on your behalf. An electronic funds transfer (EFT) may be a cash receipt or a cash payment. Add EFT receipts and subtract EFT payments.

Service charge

Book Side of the Reconciliation

This cash payment is the bank’s fee for processing your transactions. Subtract service charges.

Interest income

Book Side of the Reconciliation

On certain types of bank accounts, you earn interest if you keep enough cash in your account. The bank statement tells you of this cash receipt. Add interest income.

Nonsufficient funds (NSF) cheques

Book Side of the Reconciliation

Nonsufficient funds cheques are cheques from customers who do not have sufficient funds in their bank account to cover the amount. NSF cheques (sometimes called bad cheques) are treated as cash payments on your bank reconciliation. Subtract NSF cheques, because you did not receive the money for these cheques.

The cost of printed cheques

Book Side of the Reconciliation

This cash payment is handled like a service charge. Subtract this cost.

Book errors

Book Side of the Reconciliation

Correct all book errors on the Book side of the reconciliation. For example, you may have recorded a $120 cheque that you wrote as $210. Book errors can be added or subtracted.