Finding Other Adjustments (Bank's Records)
Your next concern is finding out what you know that the bank does not. Start by verifying that each item that appears in your records (the cash disbursements list, the cash receipts list and the previous bank reconciliation) also appears on the bank statement. Highlight the items in your records that are not listed in the bank statement (Exhibit 4). Items that increase your cash balance should be added to the bank's balance. Items that decrease your cash balance should be subtracted from the bank's balance.