Bank Reconciliation

Kevin E. Paz
Business Mathematics
Things involved:
 Check balance
 Bank statement balance
Sample Check:
Check stub
Date Check Particulars Deposit Withdrawal Balance
Number
Example
 Mr. Arce writes check #11926 on July 17, 2019, for
₱2,360.00 payable to LESI and #11927 on July 19, 2019
for ₱10,695.00 payable to PSBank. The balance brought
forward from the last checkstub is ₱12,981.91, and since
that entry he has made a cash deposit of ₱37,000.00 on
July 25, 2019. Record this in the check stub.
Bank Statement Sample
Factors to consider for reconciliation:
Miscellaneous – these are charges such as service
charges, deductions for items deposited that are
uncollectable, charges for printing checks, and other bank
charges that may not be shown in the checkbook.
To reconcile: Deduct from the checkbook balance

 Outstanding checks – these are checks that have been

issued but are still in the possession of the payee or have
not reached the bank for payment.
To reconcile: Deduct the total from the bank
statement balance
Factors to consider for reconciliation:
Deposit in transit – made too late to be included in the
bank statement.
To reconcile: Add the total to the bank statement
balance

 Depositwritten twice on the stub

To reconcile: Deduct from the checkbook balance

Check issued written twice on the stub

To reconcile: Add to the checkbook balance
Factors to consider for reconciliation:
Deposit omitted on the stub
To reconcile: Add to the checkbook balance

 Check issued omitted on the stub

To reconcile: Deduct from the checkbook balance
Factors to consider for reconciliation:
 Deposit wrongly recorded on the stub
To reconcile:
1. If the amount recorded on the stub is more than
the actual amount deposited, deduct the
difference from the checkbook balance.
2. If the amount recorded on the stub is less than
the actual amount deposited, add the difference
from the checkbook balance.
Factors to consider for reconciliation:
 Check issued wrongly recorded on the stub
To reconcile:
1. If the amount recorded is more than the actual
amount issued, add the difference to the
checkbook balance.
2. If the amount recorded is less than the actual
amount issued, deduct the difference to the
checkbook balance.
Example 1:
 The bank statement of A. Aquino showed a balance of ₱40,549
on August 3. The checkbook balance on the same date showed
₱31,525. On comparing the bank statement with the
checkbook, he discovered the following:
a. The following checks were not yet presented for payment:
#120 - ₱1,480 , #136 - ₱3,140 , #140 - ₱5,292
b. Check #160 - ₱2,480 had been recorded on the check stub
as ₱2,840
c. Service charge of ₱118
d. Cancelled check ₱1,130 was not recorded on the checkstub
Prepare a reconciliation statement.
Example 2:
 On September 1, Tony was given his monthly bank
statement showing his balance to be ₱17,063.50. On that
date, his checkbook showed a balance of ₱25,194.50.
Upon examining the bank statement and his checkbook
he discovered the following:
 a. Outstanding check was ₱4,035.00
 b. Deposit of ₱7,500 was not recorded on the stub
 c. Deposit of ₱6,185 was entered as ₱6,851 on the stub
 d. Check deposited for ₱25,930 was entered as ₱24,930 on
the stub
 e. Deposit of ₱10,240 was recorded twice on the stub.
 f. Deposit of ₱12,560 was late to be included in the bank
statement
 g. Service fee of ₱200 was deducted by the bank
 h. Check issued for ₱15,645 was written on the stub as
₱18,645
Prepare a reconciliation statement.