Bank reconciliation without updating the cashbook

It is possible to prepare a bank reconciliation statement without bothering to update the cashbook first. In this case, all the items that do not appear in both the cashbook and on the banks statement would go on the reconciliation statement.

If we use our previous example, then the reconciliation statement would appear as follows:

M Sim - Bank Reconciliation Statement as at 31 July 2003

-	£	£
Balance as per cashbook	-	310
Add	-	-
S Davey (unpresented cheque)	75	-
Interest received	5	-
Credit transfer	560	640
-	-	-
Less	-	950
J Thompson	230	-
Standing order	300	530
-	-	-
Balance as per bank statement	-	420

Other than for unpresented and undeposited cheques, there is no actual method of working out whether items found on the banks statement but not in the cashbook should be added or subtracted. It has to be worked out intuitively. Consider the following explanations for the above example:

1. Interest received - is not in the cashbook so if added on to cashbook figure then we will be closer to the bank statement.
2. Credit transfer - is not in the cashbook so if added on to cashbook figure then we will be closer to the bank statement.
3. Standing order has been deducted in bank, so if deducted from the cashbook figure we are more likely to get a closer approximation to the bank statement balance.