Bank Reconciliations

Bank Reconciliation

Explains the difference between cash reported on bank statements and cash balance on the company’s books and provides information for reconciling journal entries.

3 Potential Cash Totals

1). Balance per the books (t-accounts)

2). Balance per the bank (bank statement)

3). Correct Balance

NSF Checks

Checks received from a customer and deposited by the company that have “bounced”

Interest

This is the interest paid by the bank to the company on its bank balance.