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December 17, 2007

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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Comments

14 Responses to “What are some reasons that cause the balance on the bank statement to differ from the cash balance on the books?”

  1. Charles on December 24th, 2007 10:49 am

    It is very good for we the student of accounting, it enables us to make more research and study ahead.

  2. Charles on December 24th, 2007 10:52 am

    Uncredited cheque, unpresented cheque, credit transfer, bank charges, standing order etc

  3. osiris buendia on January 2nd, 2008 3:25 pm

    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?

  4. Sering Mass Jallow on January 3rd, 2008 3:10 am

    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.

  5. paul on January 27th, 2008 8:49 am

    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)

  6. john on February 15th, 2008 9:39 am

    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

  7. alex on February 21st, 2008 4:54 pm

    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

  8. rochelle on April 4th, 2008 2:15 am

    which one is bigger? balance per books or per bank statement?

  9. emz on June 7th, 2008 12:16 am

    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.

  10. emz on June 7th, 2008 12:17 am

    What if the balance of per book is higher than per bank?

  11. m.izhar khan on June 17th, 2008 2:49 am

    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

  12. IMMA on August 5th, 2008 6:10 am

    a wonderful site filled with rains of new simplicities of accounting.my way to accounting degrees steps to easiness!greatly appreciated-kip t uuup!!!!!!!!

  13. deeja on December 14th, 2008 2:02 pm

    Excellent material! This helped me a lot with my IGCSE Accounting homework. Thank you very much :)

  14. MM on June 28th, 2009 12:46 am

    I really love all of your simple but useful way of explanation. You inspire me the desire to become a good accountant. Thank you so much!

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