Hi all,
I wish to know about the errors in bank reconciliation statement. Does anybody have any idea about the same?
If yes, please reply.
Sometimes, banks make mistakes either by depositing or withdrawing amounts which are incorrect to the bank accounts. These errors show up on the bank statements, along with the adjustments and corrections to those problems. The faults and corrections need to be reconciled properly just to give you an audit trail of few reconciliation steps, and also to support the Oracle Payables’ Positive Pay feature by allowing the error reconciliation and correction lines.
Banks resolve their errors using these two methods: Adjustment and Reversal. The following two cases are explained here, by using this example:
A cheque was for $100.00, but bank saved this payment as $10.00 just by mistake. Your bank statement entry will be of $10.00.
A cheque was for $100.00, but bank saved this payment as $10.00 just by mistake. Your bank statement entry will be of $10.00.
A bank reconciliation statement is a summary or review of business and banking activity that settles an entity’s bank account with its financial records. The statement outlines the deposits, withdrawals, and other activities affecting a bank account for a particular period. It is one useful financial internal control tool that can be used to prevent fraud.
The statement makes sure the payments have been processed and cash collections have been deposited to the bank. It helps recognize discrepancies between the bank balance and book balance to be able to process required corrections or adjustments. It is the accountant that normally processes the statements once a month.
To complete a statement, it requires using both the current and previous month’s statements including the closing balance of the account.
