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Bank reconciliation: step-by-step with examples

A practical sequence you can follow every month, with worked examples generated by our reconciliation engine.

Steps

1. Get the statement and the Cash ledger for the same date.

2. Tick off matching deposits and payments; watch for one deposit covering several receipts.

3. Bank side: add deposits in transit, subtract outstanding checks, correct bank errors.

4. Book side: add interest and bank collections, subtract fees and NSF checks, correct book errors.

5. The two adjusted balances must agree. Journalize only book-side items.

6. If they don't agree, recheck prior outstanding items and look for transpositions — never plug.

Worked examples

Reconcile Corner Bean Café'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.

Adjusted bank and adjusted book balances both equal $6,311.00. Only book-side items are journalized.

Reconcile Northlight Design 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.

Adjusted bank and adjusted book balances both equal $8,600.00. Only book-side items are journalized.

Try it yourself (graded)

Item 1 of 2

Freeeasy

Reconcile Corner Bean Café'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.

Bank statement balance (Mar 31, 2026)

$6,036.00

Cash account (books)

$6,730.00

1. Classify each unmatched item

  • In the books Deposit of $870.00 recorded Mar 31, not on statement ($870.00)

  • In the books Check #1182 for $190.00 not yet cleared (($190.00))

  • On bank statement Monthly service fee $14.00 (($14.00))

2. Adjusted balances
3. Adjusting entries the books need

Record only book-side items. Leave this empty if no entries are needed.

Bank reconciliation simulator →Reconciliation worksheet →

Original content. Figures are fictional; examples are generated and checked by our accounting engine. Updated 2026-10-29.