Accounting: bank reconciliations - mistakes in bank statement and cash receipts/payments journal?

Question

Balance as per Bank Statement x*x

Add: Outstanding Deposits x*x

Less: Outstanding Checks x*x

Adjust for bank error: [if necessary] x*x

Balance as per Bank Ledger Account x*x

when do i adjust for bank error? when there is a mistake in the bank statement or a mistake in the cash journals? is it both?

Answer 1

If the bank made the error, it has to make the correction, not you, so you don't pass any journal entries. However for the bank rec to balance, it has to appear on it. You only pass journal entries for items in the bank statement and omitted by you in your cash book, e.g. bank charges, NSF cheques, etc.

Refer to the link attached.