What is a deposit in transit and why is it included in a bank reconciliation?
A deposit in transit is when the company sends a check or cash to the bank, but as of the end of the month, the bank has not yet processed the receipt of the funds. Therefore, the company’s monthly bank statement excluded the funds, even though they have already recorded the receipt of the funds in their accounting records. The company should add deposits in transit to the balance per bank statement.
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How to prepare a bank reconciliation?
How to prepare a bank reconciliation? The point of preparing a bank reconciliation is to reconcile the cash per bank statement to the cash balance per books (i.e. accounting records). There are a number of reconciling items, and its important that the accounting team always understands how to reconcile cash. Cash balance per bank: When […]