What are some reasons that cause the balance on the bank statement to differ from the cash balance on the books?
The reasons for the difference between the balance on the bank statement and the balance on the books include outstanding checks, deposits in transit, bank service charges, check printing charges, errors on the books, errors by the bank, electronic charges on the bank statement not yet recorded on the books, and electronic deposits on the bank statement that are not yet recorded on the books.
If an item is on the books but has not yet appeared on the bank statement (outstanding checks, deposits in transit), the items are entered as an adjustment to the balance per bank statement. Outstanding checks are a deduction to the balance per bank; deposits in transit are an addition to the balance per bank.
If an item is on the bank statement but has not yet been entered on the books, the items are entered as an adjustment to the balance per books. Bank service charges, check printing charges, and other electronic deductions that are not yet recorded on the books are deductions from the cash balance on the books. Electronic deposits not yet on the books are added to the cash balance per books.
Learn more about Bank Reconciliation.
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12 Responses to “What are some reasons that cause the balance on the bank statement to differ from the cash balance on the books?”
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It is very good for we the student of accounting, it enables us to make more research and study ahead.
Uncredited cheque, unpresented cheque, credit transfer, bank charges, standing order etc
I am did a reconcilitiation of a Trust account and my reconciliation balance but the Trust listing bank of the month has a differece.
Where can be the problem?
this is not only good for students as said by Charles on his comments on 24/12/07 but also good for accountants and auditors.
Thank you so much for this great site.Can u believe i was given accounting work to do but did not know until i landed on this site.May God bless you so much
Paul(uganda)
that good and very good beacause i got it after a very long time search on web for the accounting refrences and found very much usefull for the begginers of accounting like me, whos know nothing.
john andrew
I am doing my first bank recon in the new year and starting new with Simply. It wont balance and I have checked everything over. I have an unresolved balance which is quite big. When I started I added the outstanding chqs from last year into the recon and then in set up - accounts - I added the bank balance to my 1060 bank account as at 01 Jan. Was this right ? I think it must be something to do with the way I set up but dont know what. I havent clicked on “finish entering history” yet so could still change it. Thanks for any help ! Desperate
which one is bigger? balance per books or per bank statement?
I discovered your site an hour ago and I’m very glad, because I have unresolved problem regarding my bank reconciliation and I hope you could help me.
What if the balance of per book is higher than per bank?
hy it is very good site at all i really enjoy a lot
but please include some more topic like ,
voucher system, parnership , and worksheet
a wonderful site filled with rains of new simplicities of accounting.my way to accounting degrees steps to easiness!greatly appreciated-kip t uuup!!!!!!!!