BANK RECONCILIATION STATEMENT

CONTENT

1. Introduction to Bank Documents
2. Definition of Bank Statement
3. Meaning of Bank Reconciliation Statement
4. Causes of Discrepancies/Disagreement between Cash Book and Bank Statement
5. Interpretation of Bank Statements

Introduction to Bank Documents

It is normal for businessmen to be interested in knowing his balances of cash in hand and bank at the end of the month. The bank also checks the customer’s account with it to know the customer’s worth at the end of each month. While customer prepares cash book to show the required balances the bank prepares a bank statement. The usual practice is that, bank debits all cheques that are credited to the cash book because they reduce the amount of money in the customer’s credit and credit all cheques that are debited to the cash book because they work to increase the customer’s credit in it (bank).

Definition of Bank Statement

Bank Statement is a document prepared periodically and sent by the bank to a current account holder showing the transactions between the customer and the bank within a period of time usually a month.