Bank reconciliation, made simple.
Learn why the cash book and the bank statement differ, and how to prepare a bank reconciliation statement, from basic causes to adjustments, overdrafts, and practice problems.
Course overview
Bank reconciliation is the process of comparing a business's cash book with its bank statement (passbook) to find and explain the differences. It helps detect errors, delays, and fraud, and confirms the true bank balance.
- Understand what bank reconciliation is, and why it is needed
- Identify common causes of differences between the cash book and the passbook
- Compare the cash book and the passbook and see how each records transactions
- Prepare a bank reconciliation statement in the correct format
- Adjust for cheques issued but not presented, cheques deposited but not credited, bank charges, interest, and direct deposits
- Reconcile accounts with a bank overdraft, and prepare an adjusted cash book
- Spot bank errors and business errors and correct them
- Understand online reconciliation, and solve practical problems and MCQs
Bank Reconciliation lessons
Follow the lessons in order, or search and filter to jump to a subject.
Introduction to Bank Reconciliation
Learn what bank reconciliation is and when it is done.
Need and Importance of Bank Reconciliation
Understand why matching bank and book records matters.
Causes of Differences in Bank Balance
Find out why the cash book and passbook balances differ.
Cash Book vs Passbook
Compare the two records and how each shows bank transactions.
Bank Reconciliation Statement Format
Learn the layout used to prepare a reconciliation statement.
Bank Reconciliation Adjustments
Handle cheques issued, deposited, charges, interest, and more.
Overdraft Bank Reconciliation
Prepare the statement when the account shows an overdraft.
Adjusted Cash Book
Update the cash book first, then reconcile with the passbook.
Bank Errors and Corrections
Identify errors by the bank or business and correct them.
Online Bank Reconciliation
See how reconciliation works with online banking and software.
Practical Problems
Practise numerical problems on reconciliation statements.
Bank Reconciliation MCQs
Test your understanding with multiple-choice questions.
Understand the differences, then reconcile them.
The lessons start with why balances differ, move to the statement format and adjustments, then cover overdrafts, errors, online reconciliation, and practice questions.