Bank reconciliation statements

Bank reconciliation statement (銀行調節表) - It is needed when the balances between bank account (cash book) & bank statement are different. - The purpose is to highlight & explain the differences.

Bank account Bank statement The bank account of the cash book is prepared by depositor An account for recording every receipts & payments in relation to the movements of bank. Bank statement A document prepared by bank (e.g. HSBC) It will be sent to its client and depositor at the end of each regular period (usually at the end of each month).

Reasons of difference 1) Timing difference 2) Errors Items recorded on the Bank Account of cash book but not on Bank Statement; E.g. Unpresented cheques; or Items recorded on the Bank statement but not on Bank Account of cash book. E.g. Bank charges, standing order 2) Errors Transposition of figures/ amounts (e.g. salary $2,000 paid by cheque but recorded as $20 in bank account)

Timing difference Recorded in bank account (T)? bank statement (HSBC)? Examples Figure/ amount $ V X 1) Unpresented cheques (未兌現支票) 2) Uncredited deposit (銀行未紀錄的存款) 3) Dishonoured cheques (拒付/失效支票) 4) Credit transfer (轉帳存入) 5) Bank charges 6) Standing order (常規指示) 7) Direct debits/ Auto-pay (直接付款/自動轉帳)

The implication of Dr. & Cr. Balance Dr. Balance Cr. Balance Bank Account (T) Deposited $ in bank (a current asset) Borrowed $ from bank (Bank overdraft O/D, a current liab.) Statement (HSBC) Borrowed $ from bank (Bank overdraft O/D, a current liab.) Deposited $ in bank (a current asset)