All 26 Bank Reconciliation questions
More in Bank Reconciliation
What does 'reconciling item' mean? What are the steps to prepare a bank reconciliation? Which differences require an adjustment to the cash book and which do not? How does a bank reconciliation help detect fraud or error? How do bank errors feature in a reconciliation? How do you reconcile when starting from the cash book balance instead of the statement? What is the correct order: update the cash book first or reconcile the statement first? How does electronic/online banking change the reconciliation process? How do you treat interest received and charged in the reconciliation? How do you deal with stale or cancelled cheques in a reconciliation?
Advertisement
Back to results for “Bank Reconciliation”
Bookkeeping › Bank Reconciliation

What causes a bank reconciliation not to balance and how do you investigate?

Intermediate

Answer

Non-agreement can arise from omitted or duplicated cash book entries, transposed figures, missed statement items, incorrectly listed unpresented cheques/lodgements, or a bank error. Investigate by re-checking each reconciling item, agreeing individual cash book entries to the statement, verifying casts, and confirming the opening balances reconcile. Bank errors are queried with the bank.
Real-world example A stubborn difference is traced to a transposed cheque amount (£54 entered as £45) in the cash book.

Common follow-ups: What is a transposition error? | How do you handle a suspected bank error?

Correcting Errors Cash Book & Petty Cash Bank Reconciliation
All 26 Bank Reconciliation questions