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What do all reconciling items on the book side require for cash?


What is a Bank reconciliation?
Bank reconciliation is a monthly process by which we match up the activity on the bank statement to ensure that everything has been recorded in the company’s or individual’s books. There are two parts to a bank reconciliation, the book (company) side and the bank side. When the reconciliation is completed, both balances should match.
 Reconciling items on the book side require for cash :
There are a number of items that can cause differences between your book and bank balances. Here is a list of the most common items you’ll encounter when doing a bank reconciliation:
1.    Deposits in Transit=
     A deposit in transit is a deposit that has been submitted to the bank but has not get been recorded by the bank. The account holder has recorded the deposit in his records but the bank has not.
2.    Outstanding Checks=
     When a check is written it takes a few days to clear. Most businesses have a number of outstanding checks at the end of the month. Outstanding checks if not recorded can make a difference in book side.
3.     Bank Service Charges=
     Bank service charges are subtracted from the book balance since they are a decrease in the account balance and have not yet been recorded.
4.    Interest Earned=
     Some banks pay interest on account. The account holder does not know how much the interest will be until the bank statement is received.. Interest earned is added to the book balance to reflect the increase in the balance from the deposit of interest.
5.     Returned Checks=
     Returned checks should be subtracted from the book balance since the bank removed the amount from the balance when the check bounced.
6.   Recording Errors=
   Recording errors should be added or subtracted from the book balance. If the item cleared the bank for less than the amount in the books, add the amount of the error. If the item cleared the bank for more than the amount in the books, subtract the amount of the error.

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