Bank Reconciliation

(noun)

A process that explains the difference between the bank balance shown in an organization's bank statement, as supplied by the bank, and the corresponding amount shown in the organization's own accounting records at a particular point in time.

Related Terms

  • bank statement
  • journal entry

Examples of Bank Reconciliation in the following topics:

  • Reconciling Cash Accounts and Bank Statements

    • A bank reconciliation is an internal control that ensures that the cash in its accounts equals what it has recorded in its books.
    • A bank reconciliation is a process that explains the difference between the bank statement on the amount shown in the organization's own financial records.
    • A bank reconciliation consists of two columns; one for the book balance, the other for the bank balance.
    • The reconciliation is not complete until the adjusted column equals the unadjusted column.
    • Describe how a company uses a bank reconciliation as an internal control
  • Basics of Cash Management

    • A company manages its cash primarily through the use of a voucher system and bank reconciliations.
    • Bank reconciliations, or the process of checking to make sure that a business's financial records on cash equals how much is in the business's bank accounts, are especially useful as a control over deposits.
  • Discrepancies

    • At the end of each month when you get your bank or credit card statement, you will need to reconcile each account in your accounting program against the statement.
    • Then correct it and you can proceed with your reconciliation.
    • In accounting, reconciliation refers to a process that compares two sets of records (usually the balances of two accounts) to make sure they are in agreement.
    • Well reconciliations refers to two sets of records (what is being put in the well compared to what actual costs are being spent).
    • Describe the process of reconciliation as a means of finding and resolving discrepancies
  • Cash Controls

    • Bank Reconciliations: A process where the cash accounts on a business's books are regularly checked against bank statements.
  • Aftermath and Reconciliation in Rwanda

  • A Bank Failure

    • A bank failure is a bank develops financial problems and fails.
    • Moreover, the bank could sell loans to other banks.
    • Bank borrows the funds from the central bank or from another commercial bank.
    • How does a bank prevent a bank failure?
    • Your bank could ask other banks for a loan, but other banks may decline if they believe your bank will fail.
  • Online Direct Banks

    • A direct bank is a bank without any branch network.
    • Direct banks were originally based on providing banking services via telephone.
    • Upon realizing this, traditional banks began to offer limited online banking services.
    • The initial success of internet banking services provided by traditional banks led to the development of internet-only banks or "virtual banks. " These banks were designed without a traditional banking infrastructure, a cost-saving feature that allowed many of them to offer savings accounts with higher interest rates and loans with lower interest rates than most traditional banks.
    • One of the first fully functional direct banks in the United States was the Security First Network Bank (SFNB).
  • The Glass Steagall Banking Act

    • This law divided the functions of investment banking and commercial banking.
    • First, the FDIC closes the bank and seizes the bank's assets.
    • Next, the FDIC keeps the bank open and searches for another bank that will buy the failed bank.
    • The FDIC also allows a bank to cross a state line to buy a failed bank.
    • Contagion is a bank run on one bank leads to bank runs on other banks.
  • Becoming an International Bank

    • Banks in the United States use four methods to become an international bank, which are:
    • Method 1: The U.S. bank opens a bank branch in a foreign country.
    • Bank branches help the bank transfer money across nations' borders.
    • The U.S. bank buys and becomes a majority shareholder of a foreign bank.
    • Method 4: The U.S. bank creates an international banking facility (IBF).
  • Clintonomics

    • Clinton also appointed two widely considered "moderate advocates of tight money", Alice Rivlin and Laurence Meyer, and other appointments to the central bank perpetuated this trend of moderates.
    • All were signed into law by Clinton, along with the Financial Services Modernization Act of 1999, which allowed banks, insurance companies and investment houses to merge, thus repealing the Glass-Steagall Act, which had been in place since 1932.
    • Clinton signed the Omnibus Budget Reconciliation Act of 1993 into law.
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