3.4 Preparing a Bank Reconciliation
Bank Reconciliation Steps
A big part of effective internal controls over cash is performing a bank reconciliation each month to ensure that the amount shown in the books agrees with what’s in the bank. In this subchapter, we explain why bank and book differences occur and how to reconcile them should you find them.
Because of timing differences and bank charges, the amount recorded as cash on your books at the end of the month usually won’t match the amount listed on your bank statement. To get the true value of cash for the end of each month—the amount you can accurately list on your balance sheet—it’s necessary to make adjustments ...