All 26 Bank Reconciliation questions
More in Bank Reconciliation
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? How does the timing of banking affect month-end reconciliation? How do you handle a customer's standing order paid into the wrong period? How would a fraudulent unrecorded withdrawal be detected in reconciliation?
Advertisement
Back to results for “Bank Reconciliation”
Bookkeeping › Bank Reconciliation

How does the bank reconciliation interact with the financial statements?

Advanced

Answer

The adjusted cash book balance—after all updates—is the bank figure reported in the balance sheet under cash and cash equivalents (or as an overdraft under current liabilities). The reconciliation provides evidence the reported bank balance is accurate and complete, and any period-end reconciling items are properly reflected or disclosed.
Real-world example The year-end bank figure in the accounts is the reconciled, adjusted cash book balance, supported by the reconciliation.

Common follow-ups: Which balance goes into the accounts? | Where is an overdraft shown?

Trial Balance Cash Book & Petty Cash Bank Reconciliation
All 26 Bank Reconciliation questions