Bank statement
Document produced by the bank which shows the cash held by a business with the bank. It lists the deposits, withdrawals and balance of the business's bank account over a stated time period usually one month.
Bank reconciliation statement
This document brings into agreement the balance of the business's bank account with the bank's records of the business's account, after all outstanding transactions have been taken into consideration.
Night safe deposits
Deposits made by the business at night to the bank. These items are usually not recorded by the bank at the end of the month.
Unpresented cheques
Cheques which have been drawn on the business's account but which have not yet been presented at the bank for payment. The bank statement shows only those cheques it has honoured (ie paid).
EFT items
Electronic funds transfers may be received or paid electronically (directly) into or out of the business's bank account.
Direct deposits
The business can authorise the bank to accept deposits on its behalf. Only whent the bank statement is issued does the business receive confirmation of the increase in its deposits. Rent Revenue is commonly deposited directly inot the business's bank acco
Bank charges
When the bank has transactions with the business, various bank fees can apply. These include fees for account keeping, merchant services (bankcard/visa transactions) and fees for the use of EFTPOS facilities. These are shown in the bank statement in the d
Interest revenue
Interest earned by the business for money invested in the bank. Usually earned through a cash management account or term deposits. This is shown in the bank statement in the credit column.
Dishonoured cheques
These are cheques that have been deposited by the business into its bank account and recorded through the CRJ as a deposit. However, due to insufficient funds in the customer's bank account these cheques are returned to the business without the funds bein
Business errors
These are errors made by the business in recording its receipts or payments in the Cash Receipts Journal or the Cash Payments Journal. These errors are corrected by reversing the incorrect amount and re-entering the correct entry into the appropriate jour
Bank errors
These are errors made by the bank and can include overcharging of fees, entering incorrect amounts for deposits or cheques. The bank needs to be notified of these errors and an adjustment made in the Bank Reconciliation Statement until the error has been
Overdraft
When the business's bank statement shows a Debit balance. This means the business is now an asset to the bank because it owes the bank back the money it has overdrawn its account by.
Credit
When the business has money in the bank the bank statement will show this balance state.
Final balance
When preparing the bank reconciliation statement this figure from the bank statement is used as the first entry.
Added
If the bank statement shows an overdraft then this will be done with unpresented cheques in the bank reconciliation statement.
Subtracted
If the bank statement shows an overdraft then this will be done with deposits not yet credited in the bank reconciliation statement.
Bank account
The final balance in the bank reconciliation statement should match this figure in the business's records.
Asset
From the business's point of view money in the bank represents this.
Liability
From the bank's point of view money the business has in the bank represents this.
Credit column
Deposits recorded in the cash receipts journal are checked with this column in the bank statement.
Debit column
Cheques recorded in the cash payments journal are checked with this column in the bank statement.
Current bank statement
The previous bank reconciliation statement should be checked with this record at the beginning of the bank reconciliation process.
Current bank reconciliation statement
Circled amounts in the previous bank reconciliation statement are entered into this document at the end of the bank reconciliation process.
Bank reconciliation process
The process used to check if the business's records and the bank's records are in agreement given all the outstanding amounts. It involves checking the cash journals of the business with the bank statement every month and recognising differences. A bank r