Simplifying the Bank Rec

A bank statement reconciliation or “bank rec” is a crucial step in sustaining the accuracy of your monetary data. When a bank rec is getting you down, it’d assist to recall this straightforward rule: PUT IT WHERE IT ISN’T.

Listed here are three unrelated gadgets as an instance this easy-to-remember rule:

Merchandise 1. The bank statement exhibits a upkeep payment of $6.00. Since this bank payment is proven on the bank statement, you have to PUT IT WHERE IT ISN’T. This implies you’ll need to subtract $6.00 from the money steadiness proven in your data. fake bank statement

Merchandise 2. Your data point out that $150 was deposited close to the tip of the interval indicated on the bank statement. Nonetheless, the deposit will not be proven on the bank statement. After confirming that the bank has obtained that deposit, PUT IT WHERE IT ISN’T. You have to add $150.00 to the steadiness proven on the bank statement.

Merchandise 3. Of the various checks written, 4 haven’t but cleared the bank. For the reason that 4 checks are in your data, however should not but on any bank statement, PUT THEM WHERE THEY AREN’T. Deduct the quantities of the 4 checks from the steadiness on the bank statement. (Often, a number of checks written in earlier months are among the many checks not but clearing the bank account.) Every of the gadgets that you have to put into your accounting data will contain two accounts due to double-entry accounting. Merchandise 1 will contain a money account and an expense account. In accounting phrases, this implies a credit score to the account Money for $6.00 and a debit to the account Bank Charges Expense for $6.00. (No entry was required for Merchandise 2 or Merchandise 3, since these things are already in your data.) After adjusting the steadiness on the bank statement and the steadiness in your data, the 2 adjusted balances ought to agree. If the adjusted balances don’t agree, you have to examine each merchandise in your data and on the bank statement. It’s potential that you just or the bank could have entered an quantity incorrectly. Additionally recheck your math. You’ll be able to learn a extra detailed dialogue of the subject and lots of different accounting matters on AccountingCoach.com.