As discussed in past modules, cash and bank reconciliations are required at the end of each month

As a refresher:

We pull the cash balance per the accounting system

We obtain the balance per the bank by reviewing the bank statement

We compare the figures and make adjusting entries where required

It is important that ALL cash balances be reconciled:

Petty cash

Bank balances (in all currencies)

Mobile money balances

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Qs: Can someone explain to me a bank reconciliation?

Qs: And a cash reconciliation?

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Test your knowledge

1)What do we do when we see a transaction on the bank statement that is not recorded in the general ledger?

2)What do we do when we see a transaction recorded on the general ledger but does not appear on the bank statement?

Answers:

1)All transactions from the bank statement should be recorded on the general ledger as they must balance

2)It is possible that there are transactions that are recorded on the general ledger but do not appear on the bank statement (such as outstanding cheques) as there is a delay. These would be reconciling items to the general ledger balance when performing the reconciliation

As the preparer of the reconciliation, you are responsible for identifying and investigating all differences

It is important that ALL reconciling items be investigated prior to review by the Manager or Controller

If you need assistance with an issue, bring it up as early as possible to ensure timely resolution

As a junior accountant you will probably be responsible for preparing petty cash and bank reconciliations. It is your responsibility that ALL differences are resolved and ALL adjusting entries are posted.