NOTE: While a companys records consider an increase to cash a DEBIT, from the banks side it is considered a CREDIT. Be careful with this language.

1. What items increase the balance in a banks account? Would the list of items include a debit or credit memo from the bank?

2. What items decrease the balance in a banks account? Would the list of items include a debit or credit memo from the bank?

NOTE: The T-Account method for bank reconciliations is a tool.

NOTE: After the reconciliation is complete, you must follow through and write the adjusting entries into the journal and post to the ledger or you will still be out of balance on your statements.

1. What is the purpose of a bank reconciliation? What is being reconciled?

2. List the common items that may need to be added or subtracted from the Ledger Cash Balance.

3. List the common items that may need to be added or subtracted from the Bank Statement Balance.