How to Prepare a Bank Reconciliation

In this video, we navigate the process of preparing a bank reconciliation.

A bank reconciliation is an essential accounting procedure that helps businesses keep their financial records accurate and updated. It is the process of matching the balances in an entity's accounting records for a cash account to the corresponding information on a bank statement.

In this video, we're walking you through a step-by-step example to illustrate how you can prepare your own bank reconciliation. You'll learn how to account for unrecorded cash receipts, interest earned, bank fees, and NSF checks to arrive at the adjusted book balance, which, if everything is done right, should equal the adjusted bank balance.

But the work doesn't end with the reconciliation, we'll also demonstrate how to make necessary journal entries for items that need to be recorded in our books. We'll cover the process of recording interest earned, collecting notes receivable, recording bank service charges, and handling NSF checks. *Remember, only items affecting the book balance require entries, and each of those entries will impact the cash account.

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Jonathan M. Wild
www.wildaccounting.com

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