Bank reconciliation
A bank reconciliation explains the difference between the bank ledger balance and the bank statement at a date, after correcting omissions and errors in the ledger. Outstanding payments and deposits may create legitimate timing differences. After adding any omitted bank charges or direct receipts to the ledger, compare that corrected balance with the statement and explain remaining timing differences.
Worked example
A cheque issued but not yet presented explains why the statement balance exceeds the adjusted ledger balance.
Common mistake
Posting a timing difference as a new expense or assuming the unadjusted ledger is the correct reported balance.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | F1 | Direct | July 2027–August 2028 |
| ACCA | FA | Direct | September 2026–June 2027 |
| ACCA | K1 | Direct | July 2027–August 2028 |
| CIMA | BA3 | Direct | Official assessment-window verification pending |
| FIA | FFA | Direct | September 2026–June 2027 |
Related terms
Also called: bank reconciliation statement