Nader Andrews, MBA

Methods to Reconcile Financial institution Assertion to Common Ledger?

Reconciling the financial institution assertion to basic ledger is just not too arduous, however it isn’t too straightforward both. Some accountants have no idea how one can reconcile as a result of not all schools’ professors clarify how reconciliation is finished. Many firms now take a look at their candidates for accounting positions, and the very first thing to be examined is reconciling the financial institution assertion. Money in financial institution is vital stability sheet account, and any enterprise has to trace it rigorously. The important thing aspect to have an correct reconciliation is to ensure that every line and part is correct.

Starting E book Stability                                               Financial institution Stability


+ Deposits                                                                    -Excellent Checks

-Complete Checks                                                              + Deposits in Transit

+Void Checks 

-Expenses and Charges

Ending E book Stability                                                   Ending Stability

Earlier than beginning that you must just be sure you have every part. As we will see, there are two sides of the reconciliation, and either side must stability with every others.

First aspect is your Common Ledger aspect. The start stability is the prior interval’s stability. Subtract from it whole checks written. Add to it the void checks. They’re added as a result of they have been included in checks written however as a result of they’re voided they are going to be added again. Ensure you both void the checks within the system or by a journal entry. In case your Common Ledger system means that you can void checks in it, it’s higher to do it that approach. This fashion they’re taken off the excellent checks’ record. Subtract the financial institution prices and charges. Ensure you make journal entries to e book these prices.  Then, your ending stability is the money in financial institution stability in your stability sheet. 

The opposite aspect is your financial institution stability aspect. Take the ultimate financial institution stability and subtract from it the excellent checks. Most of basic ledger programs generate this record. Ensure you clear the cashed checks both every day or periodically to have an correct excellent record. This record is for monitoring the checks which can be out however not cashed. Then, add the deposits in transit as a result of these deposits aren’t on the assertion, however they’re acquired and went to the financial institution earlier than the tip of the interval.

Earlier than ending, ensure that there are not any checks for the next interval recorded within the GL on the present interval.

On the finish you need to have the tip of month financial institution reconciliation carried out appropriately. Simply ensure that every half is correct. Additionally, ensure that the GL stability equals your reconciled stability, and it’s the identical on the stability sheet.

Nader Andrews, MBA


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