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Meaning of Bank Reconciliation Statement

Bank reconciliation statement is a statement prepared on a particular day to reconcile the bank balance as per Cash book with the balance as per bank pass book, showing entries causing difference between the two balances. In other words, it is a process that explains the difference between the bank balance shown in an organisation’s bank statement, as supplied by the bank, and the corresponding amount shown in the organization’s own cash book on a particular point of time. It is a statement prepared by the bank’s customer i.e., the account holder.


The difference between the bank balance as per cash book and balance as per pass book may occur due to various reasons. For example, a cheque or a list of cheques issued by the organization has not been presented to the bank, a banking transaction, such as a credit received, or a charge made by the bank, has not yet been recorded in the organisation’s books, or either the bank or the organization itself has made an error.

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