Bank Reconciliation

Business math day 3. Last Thursday,  June 21, 2012, our topic was about Bank Reconciliation. Here's a little something about our class discussion.

Bank Reconciliation is the process of bringing the bank's monthly report for each depositor showing deposits made, check written, cancelled checks, and service charges. Checkbook contains checks and check stubs. The checks are filled out by the depositors made, and of charges made by the bank. Reconciliation statement putting an agreement the bank statement balance and the checkbook balance.

The differences in the balances may be due to:

  1. Outstanding checks. These are checks issued by the depositor but have not yet been presented to the bank for payment.

  2. Deposits in transit. These are deposits made but late to be included in the monthly bank statement.

  3. Service charges.

  4. Errors in the check stub entries.

  5. Cancelled checks. These are checks that have been paid by the bank.

Sample Check

Here are some tips on some very important banking security measures for safe banking and keeping all frauds:

·        Fill up your own cheques. Do not rely on anyone else.

·        Do not fail to write ‘Account Payee’ or ‘A/c Payee’, unless issued for cash withdrawals.

·        Do not leave any space between ‘Pay’ and the name of the payee you write on the Cheque. Similarly, while entering the amount in words, do not leave any space after ‘Rupees’. Draw a line through the unused spaces to prevent any unauthorized additions or altercations.

·        Strike out ‘Or Bearer’ unless issued for cash withdrawal.

·        Do not leave any space between ‘Rs.’ and the amount in figures that you write. Always remember to specify the ONLY symbol ‘/-’ after the figure you have entered.

·        Never Sign a cheque leaving the amount blank.

·        Always use a pen with dark or permanent ink.

·        Destroy old cancelled cheques, unless needed for taxation purposes.

·        While issuing cheque for Credit Card Payment write full Credit Card Number.

·        If you are issuing PDC (Post Dated Cheque), make a note of it in your records.

·        Keep records of each and every cheque issued.

So that's about it. Our lesson is very helpful especially for those who owns a check or dealing with it for some time now. Make sure to read the tips above for safety measurements. I'm looking forward to this kind of lesson during class. I hope you guys learned something about my post.


Checked by: Prof. Crisencio M. Paner