You must reconcile the balance per your bank statement at each period-end (or month-end) date to the balance per your cash account in your general ledger.
There are several reasons why they might not agree:
-
Deposit entered in your Cash Receipts Register that didn't clear the bank yet (deposits in transit)
- Checks entered in your Cash Disbursements Register that didn't clear the bank yet (outstanding checks)
- Deposits or Checks clearing the bank that were not entered into your Cash Receipts or Disbursements Registers (Journal entry must be made)
- Bank error (must notify the bank)
- Bank fees, NSF checks and interest earned (Journal entry must be made)
You
can download a bank reconciliation worksheet here.
