Bank Reconciliation
Accounting glossary · Understand, connect, apply
A bank reconciliation explains differences between an entity’s cash-book balance and the bank statement balance, adjusting each for appropriate reconciling items.
Example
A deposit in transit is added to the bank side, while an unrecorded bank fee reduces the book side.
Remember the difference
Only items missing from or incorrect in the entity’s books require its journal entries. Timing differences already recorded in the books usually do not.
Updated 3 November 2026. Examples are simplified for learning. Where a term depends on US law, IFRS, US GAAP or a historical rule, check the context explained above and the requirements relevant to your course.
Study references: OpenStax financial accounting and managerial accounting. For reporting requirements, consult the applicable IFRS Standards or FASB guidance. US tax terms should be checked against the relevant tax-year IRS instructions.
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