Bank Reconciliation Process Explained
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ScribdTranslationsAMBATO TECHNICAL UNIVERSITY
FACULTY OF ACCOUNTING AND AUDITING
ACCOUNTING AND AUDITING DEGREE
ACCOUNTING ESSAY
FRANKLIN COBA
COURSE: SECOND SEMESTER 'B'
May 6, 2014
BANK RECONCILIATION
Introduction:
Bank reconciliation is the task of comparing the entries that appear in the statement.
banking with the bank book for the purpose of determining the source of the differences.
Reconciliation consists of ensuring that the bank statements match.
annotations or entries in the system made by the accountant.
Development:
Reconciliation involves verifying the equality between the accounting entries and the
certificates that arise from bank statements, carrying out the verification through a
basic control exercise, based on the opposition of interests between the company and the
bank." (Gómez, 2003, p.1)
Bank reconciliation is a process that allows you to confront and reconcile the values that
the company has registered, from a savings or current account, with the values that the
bank supplies through the bank statement." (Adán, 2012, p.1)
The companies have a bank subsidiary ledger in which they record each of the
transactions made in a bank account, such as check withdrawals, deposits,
debit notes, credit notes, cancellation of checks and deposits, etc.". (Adán, 2012,
p.1)
Bank reconciliation allows for balancing the discrepancies between the balance that
appears in the bank statement and that which appears in the accounting records of the account-
habitant." (Campo, 2007, p.1)
A bank reconciliation is the accounting procedure that allows verifying the balances.
registered at the end of a period, between the Bank General Ledger and the balance reported by
the Banking Institution, until achieving to reconcile them." (Charco, 2012, p.1)
Characteristics of a Bank Reconciliation
The delivery of cash to banks is a healthy and effective practice, since
they have sophisticated security measures and above all guarantee the integrity of
deposit. Opening a bank account should be considered: 1- It serves as a means of control
internal.2- Avoid the possible theft of money.3- Maintains balances in savings or accounts
currents that generate financial income.
Steps for a Bank Reconciliation:
Compare the receipts of the deposits made and the credit notes received with
the deposits and the credit notes that appear in the bank statement. If there is
the error must be specified and corrected.
Confront the list of checks recorded in the auxiliary books and the debit notes.
received with the column checks and debit notes from the statement. The differences must
to eliminate oneself.
Total the corrections of the entries in the auxiliary books.
Summarize the corrections of checks issued in the auxiliary books.
Prepare the bank reconciliation taking into account:
BOOK BALANCE
LESS. DEBIT NOTE | 39000 |
MORE. CREDIT NOTE | 411250 |
ADJUSTED BALANCE IN BOOKS | 683000 |
SALDO EN ESTRACTO BANCARIO | 629000 |OCTUBRE 31 DE 1998 | 300000 |
MORE. CONSIGNMENT IN TRANSIT | 246000 |
LESS. CHECKS WRITTEN AND NOT COLLECTED | 683000 |
Conclusions:
From the previous work, we understood that good internal control of a company means
to know where the money that circulates within it comes from, how it is spent and the
current cash balance, so that the person in charge of the company's accounting
have the sufficient capacity to explain the reasons for the differences that exist between the
figures in the company's records and the bank statement on a date
determined, this entire process mentioned above is known as reconciliation
banking, which if done appropriately ensures that all have been accounted for
cash operations and that the cash records in the bank and in the books of the
company is correct.
Bibliography
Adán, W. (May 9, 2012). BANK [Link] from [Link]
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Charco, W. (January 31, 2012). Understanding Bank Reconciliation in Accounting.
Obtained from [Link]
From the field, F. (June 21, 2007). Bank reconciliation. Obtained from
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Gómez, J. (May 5, 2003). Bank reconciliation and Treasury control. Retrieved from
[Link]
bank [Link]
