Bank errors and difficult reconciliations
Objective: Resolve complex reconciliations without plugs.
Recommended first: Recording book adjustments
A bank error — such as another customer's check charged to your account — adjusts the bank side and is reported to the bank, not journalized. If the reconciliation still does not balance, re-check prior-month outstanding items, look for transpositions (differences divisible by 9), and confirm the book balance date.
When a reconciliation will not balance, resist the urge to force it. Check that the statement and book balances are for the same date, that last month's outstanding items were carried forward, that every deposit and check was ticked correctly, and whether the difference is divisible by nine. Unexplained differences should be investigated and documented, never plugged.
Check your work
- Are both balances for the same date?
- Were prior outstanding items carried forward?
- Is the remaining difference fully explained?
Bank charged another customer's $120 check to this account. Add $120 back to the bank balance; no journal entry.
Common mistakes
✗ Booking a bank error as an expense.
✓ The bank will correct it; adjust the bank side only.
Guided practice
Use hints freely here.
Item 1 of 1
Reconcile Silverline Photography's bank account
Reconcile the bank statement to the Cash account at month-end. Classify each unmatched item, compute the adjusted bank and book balances, and record only the adjusting entries the books need.
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Independent practice
Try these without hints. Completing the lesson needs at least one independent item solved without revealing the answer.
Item 1 of 4
Reconcile Peak Form Fitness Studio's bank account
Reconcile the bank statement to the Cash account at month-end. Classify each unmatched item, compute the adjusted bank and book balances, and record only the adjusting entries the books need.
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References and provenance
- OpenStax, Principles of Accounting, Volume 1: Financial Accounting (accessed 2026-10-29)
Original lesson written for Bookkeeping Exercises (AI-assisted drafting). Calculations are verified by the platform's automated accounting tests. Not yet reviewed by a credentialed accountant. Updated 2026-10-29.