Getting Started
To begin preparing the bank reconciliation, you'll need the following items:
- a list of cash receipts (part of your records),
- a list of cash disbursements (part of your records),
- a copy of the last bank reconciliation statement (part of your records), and
- a copy of your bank statements since the last bank reconciliation (part of the bank's records).
The purpose of the bank reconciliation statement is to understand why the cash balance in our books does not match the cash balance in our account with the bank. Once we find out what the discrepancies are, we can determine an adjusted cash balance. To find out what the discrepancies are, we need to do two things:
- find out what the bank knows that we do not, and
- find out what we know that the bank does not.