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 accountThe bank account of the cash book is

prepared by depositorAn account for recording every receipts

& payments in relation to the movements of bank.

Bank statementA 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 difference1) Timing difference

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) ErrorsTransposition 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)?

Recorded in

bank stateme

nt (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 )

Figure/ amount $

X V

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

BankAccount

(T)

Deposited $ in bank (a current asset)

Borrowed $ from bank (Bank overdraft O/D, a current liab.)

BankStateme

nt (HSBC)

Borrowed $ from bank (Bank overdraft O/D, a current liab.)

Deposited $ in bank (a current asset)