Balance per bank definition
/What is the Balance per Bank?
Balance per bank is the ending cash balance appearing on a bank statement. A business will make adjusting entries to its own cash book balance to reconcile the difference between its own balance and the balance per bank. Examples of these adjustments are to record the fees for check processing and bank overdrafts.
It is essential to reconcile your book balance to the balance per bank on a regular basis, to ensure that your accounting records are aligned with the bank’s records, and that all discrepancies between these balances have been investigated and corrected.
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FAQs
How Does Balance Per Bank Differ From Balance Per Books?
Balance per bank is the cash balance reported by the bank on the company’s bank statement, reflecting the transactions the bank has processed. Balance per books is the cash balance recorded in the company’s own accounting records, which may include transactions not yet cleared by the bank. The two balances often differ due to timing differences such as deposits in transit, outstanding checks, or unrecorded bank fees.
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