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November 22, 2006

What journal entries are prepared in a bank reconciliation?

Journal entries are required for the items listed as adjustments to the balance per books on the bank reconciliation. These adjustments involve items that appear on the bank statement that were not recorded in the company’s general ledger accounts. Typical adjustments include the bank service charge for maintaining the account, check printing charges, fees for returned checks, and interest earned.

The journal entries for the bank fees would debit Bank Service Charges (or Miscellaneous Expense if the amounts are insignificant) and a credit to Cash. The journal entry for a customer’s check that was returned due to insufficient funds will debit Accounts Receivable and will credit Cash. Interest earned by the company will be recorded with a debit to Cash and a credit to Interest Revenue (or Interest Income).

Learn more about Bank Reconciliation.

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About the Author: Harold Averkamp (CPA) has worked as an accountant, consultant, and university accounting instructor for more than 25 years.

He is the author of the 2010 Master Accounting Download Package which has been praised for it's ability to simplify accounting in a way that anybody can understand.



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Comments

8 Responses to “What journal entries are prepared in a bank reconciliation?”

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  2. AHMED on July 10th, 2008 5:25 am

    WHEN CHEQUE RECIEVABL BE DEBIT AND WHENBE CREDIT

  3. AHMED on July 10th, 2008 5:30 am

    WHAT ABOUT THE KIND OF CHEQUE RECIVABLE ACCOUNT AND WHEN BECAME DEBITAND CREDIT

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  5. Jigna on July 20th, 2009 12:54 pm

    those transaction which were not initiated by our side has to be recorded with the help of Journal entries. Specially those for which batches can not be created in the system.

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  7. AHMED ALI (raz electric store) on December 29th, 2009 2:28 am

    what about unpresented/uncleared/unpaid cheque

  8. AHMED ALI (raz electric store) on December 29th, 2009 2:30 am

    what about unpresented/uncleared/unpaid cheque, THIS IS VERY HELP FULL TO ME,THNKS

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