Bank Differences

Differences – But Why?

Bank reconciliation process is targeted to validate the bank balance in the general ledger and explain the difference between the bank balance shown in an organization's bank statement. Learn the reasons for existence of differences between the two.

Reason for Differences:

Such differences may occur, for example, due to following reasons:

1. Cheques Not Presented: A cheque or a list of cheques issued by the organization has not been presented to the bank.

2. Banking Transactions: A banking transaction, such as a credit received, or a charge made by the bank, has not yet been recorded in the organization's books.

3. Errors: Either the bank or the organization itself has made an error while recording transactions.

4. Deposit in transit: Cash and/or checks that have been received and recorded by an entity, but which have not yet been recorded in the records of the bank where the entity deposits the funds.

5. NSF check: A check that was not honored by the bank of the entity issuing the check, on the grounds that the entity's bank account does not contain sufficient funds. NSF is an acronym for "not sufficient funds."

Summary:

Differences may occur, between bank statement and bank account in your ledger. Some examples are following:

  1. Cheques not presented
  2. Banking transactions & charges
  3. Errors
  4. Deposit in transit
  5. NSF check
Differences – But Why?

cashmgmt

Related Links

You May Also Like

  • Bank Statement Lines

    Bank Statement Lines

    So many codes in the lines that are there in a Bank Statement. It contain lots and lots of meaningful information that can help automated many tasks. Explore more!

  • Cash Management Process

    Cash Management - Process

    How the inflow and outflow of cash is linked to the operating cycles of the business? Learn the cash management process in an enterprize and it's key components.

  • Introduction to Bank Reconciliation

    Introduction to Bank Reconciliation Process

    These set of articles provide a brief introduction to Bank Reconciliation Process. This topic not only discusses the meaning of bank reconciliation process but also discusses how this process in handled in new age ERPs and Automated Reconciliation Systems.

  • Bank Reconciliation Process

    Bank Reconciliation Process

    Bank Reconciliation is a PROCESS to Validate the bank balance in the general ledger With Bank Statement. Learn the bank recon process.

  • Automated Clearing

    Automated Clearing

    In automated clearing, Bank statement details are automatically matched and reconciled with system transactions. Learn how this process works and what are the perquisites to enable the same.

  • Automated Clearing

    Manual Clearing

    In manual clearing, Bank statement details are to be matched manually considering certain rules. Learn the steps involved in manual clearing of bank transactions.

  • Disbursement Float

    Disbursement Float

    Disbursement Float is the time taken from payment creation to settlement. Collection float is the sum total of time taken by Payment Float; Mail Float; Processing Float and Availability Float. Learn more!

  • Bank Differences

    Differences – But Why?

    Bank reconciliation process is targeted to validate the bank balance in the general ledger and explain the difference between the bank balance shown in an organization's bank statement. Learn the reasons for existence of differences between the two.

  • Account Reconciliations– Why?

    Account Reconciliations– Why?

    In the previous article we talked about the meaning of the account reconciliations. Now as you now the definition of account reconciliation, in this article let us see why it is carried out.

  • Treasury Management - Functions

    Treasury Management - Functions

    Treasury management has become an specialized function. Treasury function helps in managing the Risk-return profile as well as the tax-efficiency of investment instruments. In larger firms, it may also include trading in bonds, currencies and financial derivatives. Learn about the various tasks, activities and imperatives, undertaken by treasuries in in today's context.

Explore Our Free Training Articles or
Sign Up to Start With Our eLearning Courses

Subscribe to Our Newsletter


© 2023 TechnoFunc, All Rights Reserved