Top 21 Bank Reconciliation Interview Questions You Must Prepare 07.Dec.2023

 Steps in preparing a bank reconciliation statement: 

Step 1 – Find the deposits in trit: The first step is to see if one or more deposits are in trit. You can do so by comparing the deposits in your accounting record with the deposits shown in your bank statement. If you find a deposit in your accounting record that has not been shown in the bank statement, it me that deposit is in trit.

Add to the bank statement balance all deposits that are in your accounting record but have not been entered in the bank statement.

Step 2 – Find outstanding/unpresented checks and deduct from bank statement balance: Find all checks that you have issued but have not been presented for payment. You can do so by comparing the checks issued in your accounting record with the checks paid in your bank statement. If your accounting record shows that a check has been issued and your bank statement does not show a corresponding entry for that check, it me it is an outstanding or unpresented check.

Deduct from the bank statement balance all the checks that you have issued and entered in your accounting record but have not been paid by the bank.

Step 3 – Find and add credit memorandum to your accounting record: Bank issues a credit memorandum when it collects a note receivable on behalf of the depositor. Find if there is any credit memorandum issued by the bank that you have not entered in the accounting record.

Add to your accounting record any credit memorandum not entered in your accounting record.

Step 4 – Find and deduct debit memorandum from your accounting record: Bank provides various services to its depositors such as printing checks, processing NSF checks and collecting notes receivables etc. Bank deducts charges from depositor’s account for these services and intimates him or her about such deductions by issuing a debit memorandum. Find any debit memorandum not recorded in your accounting record.

Deduct from your accounting record any debit memorandum issued by the bank but not entered in the accounting records.

Step 5 – Are the adjusted balances equal? See whether adjusted balance of your accounting record is equal to the adjusted balance in your bank statement.

Step 6 – Make appropriate journal entries: The final step in a bank reconciliation is to prepare appropriate journal entries for the items that you have not recorded yet in your accounting records.


Normally Bank Reconciliation Statement is prepared by the trader on closing date of accounts, i.e., Dec. 31 or June 30 or March 3@Sometimes it is prepared at the end of every month after preparing Cash Book or regularly after certain interval to check the accuracy of Cash Book. statutory there is no specific date to prepare it.

Bank Reconciliation Statement is a statement prepared to reconcile the balances of cash book maintained by the concern and pass book maintained by the bank at periodical intervals. At the end of every month entries in the cash book are compared with the entries in the pass book.

The causes of differences in balances of both the books are scrutinized and then reconciliation statement is prepared. This statement is prepared for a special purpose and once in a month. It is prepared with a view to indicate items which cause difference between the balances as per the bank columns of the cash book and the bank pass book at a particular date.

A Bank reconciliation is 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 of time.

Bank Reconciliation statement is prepared when bank balance as our books and bank balance as per pass book (i.e bank book) differ…it basically prepared to rectify the error occurred during the bank tractions.

A reconciliation statement is a document that begins with a company's own record of an account balance, adds and subtracts reconciling items in a set of additional columns, and then uses these adjustments to arrive at the record of the same account held by a third party.

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  • Bank Reconciliation Statement is prepared either by starting with the Bank pass book balance or Cash book balance.
  • If the balance of the Cash book is taken as a starting point then Cash book balance is to be adjusted in accordance with the entries passed in the Bank pass book and vice versa. For example: If the balance is taken as per the Cash book then the following items will be added.
  • Cheques issued but not presented for payment.
  • Amount credited in Passbook but not in Cash book.
  • Deposits made in the bank directly.
  • Wrong credits given by bank.
  • Interest credited in the Passbook.


Bank reconciliation statement is a statement prepared on a particular day to reconcile the bank balance as per Cash book or Bank statement showing entries causing difference between the two balances.

A bank reconciliation is the process of matching the balances in an entity's accounting records for a cash account to the corresponding information on a bank statement. The goal of this process is to ascertain the differences between the two, and to book changes to the accounting records as appropriate.

Reconciliation is an accounting process that uses two sets of records to ensure figures are accurate and in agreement. Reconciliation is the key process used to determine whether the money leaving an account matches the amount spent, ensuring the two values are balanced at the end of the recording period.

General Ledger Reconciliation is the process performed by accountants to verify the integrity of account balances on the company's general ledger of accounts.

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A bank reconciliation is the process of matching the balances in an entity's accounting records for a cash account to the corresponding information on a bank statement. The goal of this process is to ascertain the differences between the two, and to book changes to the accounting records as appropriate.

A bank reconciliation is used to compare your records to those of your bank, to see if there are any differences between these two sets of records for your cash tractions. The ending balance of your version of the cash records is known as the book balance, while the bank's version is called the bank balance.

  • Cheques deposited but not cleared
  • Interest/Bank Charges debited by bank
  • Direct payments made by bank not entered in Cash book
  • Cheques dishonored not recorded in cash book
  • Wrong debits given by bank
  • If it is prepared with the Bank balance as per the bank passbook, then the above procedure will be reversed i.e the items will be added to the pass book which were deducted from the cash book balance and those items will be deducted from the bank pass book balance which were added to the cash book balance.


Importance of Bank Reconciliation :

  • Preparation of bank reconciliation helps in the identification of errors in the accounting records of the company or the bank.
  • Cash is the most vulnerable asset of an entity. Bank reconciliations provide the necessary control mechanism to help protect the valuable resource through uncovering irregularities such as unauthorized bank withdrawals.
  • However, in order for the control process to work effectively, it is necessary to segregate the duties of persons responsible for accounting and authorizing of bank tractions and those responsible for preparing and monitoring bank reconciliation statements.
  • If the bank balance appearing in the accounting records can be confirmed to be correct by comparing it with the bank statement balance, it provides added comfort that the bank tractions have been recorded correctly in the company records.
  • Monthly preparation of bank reconciliation assists in the regular monitoring of cash flows of a business.

A bank reconciliation statement is a summary of banking and business activity that reconciles an entity's bank account with its financial records. The statement outlines the deposits, withdrawals, and other activity impacting a bank account for a specific period.

The items on the bank reconciliation that will require a journal entry are the items noted as "adjustments to books." These items did appear on the bank statement, but they did not appear on the company's books.

In accounting, Reconciliation is the process of ensuring that two sets of records (usually the balances of two accounts) are in agreement. Reconciliation is used to ensure that the money leaving an account matches the actual money spent.

  1. Cheques deposited into the bank but not yet collected.
  2. Cheques issued but not yet presented for payment.
  3. Bank charges.
  4. Amount collected by bank on standing instructions of the concern.
  5. Amount paid by the bank on standing instructions of the concern.
  6. Interest debited by the bank.
  7. Interest credited by the bank.
  8. Direct payment by customers into the bank account.
  9. Dishonour of cheques.
  10. Clerical errors.