Question

For bank and cash reconciliation, if i only receive information from the bank statement and don't have a cash book balance, is it safe to assume after I deduct all outstanding cheques and add deposits in transit, that the new bank balance is equal to the cash book balance

Answer 1

Yeah, you can try to do that. Adjusted cash balance is the amount to be shown as cash balance in balance sheet after adjusting for any differences in bank statement balance and ledger balance. Adjusted cash balance = Cash balance per bank + Deposits in transit - Outstanding checks Adjusted cash balance = Cash balance as per books + Note collected by bank - NSF check - Bank service charges (this formula may change slightly depending on question) However both of them gives you the same adjusted balance Comment if you still have any queries