Adjusting the Balance Per Bank
The first step of the bank reconciliation process is to adjust the "balance on the bank statement" to the true, adjusted, or corrected balance. Below is the formula for obtaining the balance.
What are deposits in transit? Those are the amounts already received and recorded by the company, but are not yet recorded by the bank. Your outstanding checks are identified as the checks written and recorded in the company's cash account but NOT yet cleared the bank - this delay can be related to timing of when the check was presented to your bank for payment and the time of occurrence. Instances such as theses will be potential adjustments to an Accountants monthly bank reconciliation.
Continue to follow the blog for more information regarding bank reconciliations.
Hello, I'm Terra the Founder and Marketing Director of Fontenot & Associates Solutions. Thank you for joining my Accounting world. Our blog's purpose is to teach with the determination of closing industry and accounting process gaps that knowingly exist with our uniquely designed detailed procedures and trainings.
My mission is to offer the best accounting results for all companies seeking to close their process gaps with actual solutions. With my Bachelors and Masters Degree in Accounting, I strive for continuous development and professional growth in this profession. My professional career has been in the Oil & Gas industry for nearly the past 10 years but my business focus is to support and train accounting professionals in all industries.