Procedure to Reconcile Bank Statements
A bank statement is reconciled to ensure orderly cash records and guard against cash losses. A form for reconciling the bank statement is available at the back of the bank statement. To reconcile a bank statement, you need to:
- Arrange the canceled checks in numerical order.
- Compare the canceled check with those listed in the statement and with the stubs. Note: When a check and a stub are matched, place a check mark beside the check amount on the bank statement and in the check stub. The stubs without check marks represent outstanding checks. List the outstanding check numbers and amounts on the bank reconciliation form.
- Enter the ending balance shown on the bank statement.
- Compare the deposits listed in the bank statement to deposits listed in the checkbook.
- Enter the total of any outstanding deposits in the reconciliation form.
- Add this total to the bank statement balance and enter the result in the form.
- Subtract the total of the outstanding checks from the amount calculated in Step 3. This is adjusted bank balance.
- Compare the adjusted bank balance to the checkbook balance.
- When the balances match, the bank statement is reconciled.
