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Bank Reconciliation

This template identifies an entity's cash transactions during the period as well as any errors that the bank may have made.

Entering Data

Most of the information needed to produce the bank reconciliation is entered on the Summary worksheet.
The left side of the worksheet lists all of the cash activity during the period. It begins with the general ledger balance at the beginning of the period and:
  • adds current period deposits and any other activity that increased cash during the period (such as interest income, checks written in a previous period that were voided during the current period, bank credit memos, and incoming wire transfers), and
  • subtracts current period disbursements and any other activity that decreased cash during the period (for example, bank charges, outgoing wire transfers, and bank debit memos).
The resulting amount is the general ledger balance at the end of the period.
The right side of the worksheet adjusts the bank statement balance for all of the cash activity and adjustments the bank has not recorded as of the bank statement date. It begins with the ending bank statement balance and:
  • adds deposits in transit (that is, deposits made by the entity during the period that have not cleared the bank as of the bank statement date) and any adjustments the bank needs to make that would increase the bank statement balance (for example, to reverse a bank fee charged in error or to adjust for a check that cleared in an amount greater than the amount for which it was written), and
  • subtracts outstanding checks (that is, checks written during the period that have not cleared the bank as of the bank statement date) and any adjustments the bank needs to make that would decrease the bank statement balance (for example, to adjust for a check that cleared in an amount less than the amount for which it was written).
The resulting amount is the adjusted bank balance. It should agree with the general ledger balance at the end of the period shown on the left side of the worksheet.
Note that deposits in transit and outstanding checks should not be entered directly on the Summary worksheet. The Summary worksheet uses the totals from the Deposits in Transit and Outstanding Checks worksheets for those amounts. Thus, those items should be entered on those worksheets.
If necessary, insert additional rows in the Summary worksheet so that all cash activity during the period or adjustments needed to the bank statement can be entered. Similarly, insert additional rows in the Deposits in Transit and Outstanding Checks worksheets if more room is needed to enter those items.