What is bank reconsiliation statement? and how it is made ? and an explanation about it?

Question

what is bank reconsiliation statement? and how it is made ? and an explanation about it?

Answer 1

Bank reconsiliation statement is a tool to verify bank a/c in your books with the bank a/c with your bank.

Diffrences can be Cheque issued but not presented, bank charges charged, cheque entered in your bank a/c but not deposited in bank, wrong amount entered by you or by bank, entries ommitted etc.

It is made by starting up with balance of passbook or as per your a/c.

Easy way is to do the reverse of what is to be done if entered properly.

Answer 2

bank recociliation staement is an analysis of causes for difference in balance between ledger bank account and the pass book.  the bank a/c in ledger is maintained by the concern who has a bank account. the pass book is made by bank. both have same transactions and so balances in both shoud be same. but owing to many reasons, there is difference.  so reconciliation statement is prepared to explain the difference. the difference is cause by certain entries made in ledger but not in bank pass book for ex. cheqques issued but not yet presented are entered in ledger but not in pass book. also intrerest credited in pass book might not yet be in ledger. cheques received from others are entered in ledger a/c but bank will enter in pass book only when these are presented to bank and realized.  

for preparing statement begin with bank pass book or trader's ledger. then add/ subtract the various items causing difference. the resultant figure will be the the same as that shown in the pass book or ledger with whos balance we begin.

Answer 3

its a statement drawn up to reconcile your own books and records to your bank statement.  

You keep a record of all lodgements into the account, and all expenditure out of the account (such as cheques, standing orders etc).  You start with your opening balance, add all income, then deduct all expenditure.  Get your closing balance.  Any differences will be outstanding cheques or lodgements.  

Basicially its an internal record of your bank account, just to make sure your bank has not made any mistakes.