Bank statement to ledger balance
A difference between the bank statement and the ledger does not always require a journal. First establish which side has already recorded each item.
Begin with the same account and cutoff
Use the closing statement balance and the corresponding bank account in the ledger for the same date. Confirm the account and currency before matching transactions. A total assembled from several bank accounts will not explain a difference in one account.
The figures below form a simplified positive-balance example in US dollars. It assumes no other differences, interest, transfers or bank errors. The outstanding deposits and payments have already been recorded correctly in the ledger; the bank charge has not.
An illustrative bank reconciliation
A simplified US-dollar example with a positive bank balance. Outstanding deposits and payments are already in the ledger; only the bank charge needs a journal. No other differences are assumed.
Bank statement
- Statement closing balance
- $24,800
- Deposits in transit
- +$1,700
- Outstanding payments
- −$2,200
- Adjusted bank balance
- $24,300
Add the deposit in transit and subtract the outstanding payments. Both items have already been recorded in the ledger.
Ledger account
- Ledger closing balance
- $24,420
- Unposted bank charge
- −$120
- Adjusted ledger balance
- $24,300
Record the bank charge that appears on the statement but is missing from the ledger. Both adjusted balances then equal $24,300.
Both adjusted balances$24,300
The journal required in this example
- Bank charges
- Debit$120
- Bank
- Credit$120
Debit bank charges $120; credit the bank account $120. The timing items are already in the ledger and are not posted again.
Adjust the bank side for timing
The bank statement closes at $24,800. Deposits of $1,700 are in the ledger but have not yet appeared on the statement. Add them to the statement balance. Payments of $2,200 are also in the ledger but have not yet cleared the bank. Subtract those payments.
The adjusted bank balance is $24,300: $24,800 plus $1,700 less $2,200. Keep the individual deposit and payment references with those totals. Their age and subsequent clearance help establish whether they are ordinary timing differences or items that need investigation.
Post the item missing from the ledger
The ledger balance is $24,420. The statement includes a $120 bank charge that the business has not posted. Recording $120 of bank charges and reducing the bank ledger by $120 brings the adjusted ledger balance to $24,300.
The journal debits bank charges and credits the bank account. The outstanding deposits and payments need no second journal in this example because they are already in the ledger. Posting them again would create another difference.
The two adjusted balances now agree. That arithmetic checks the reconciliation, but it does not establish that every underlying payment was authorized or every ledger entry belongs to the right expense account. Those are separate checks.
An old outstanding item needs more than a new date
At the next close, match the deposit or payment to the later statement and clear the corresponding reconciling item. If it has not cleared as expected, examine the original transaction and the available bank information.
A payment could have failed, been voided or been entered twice. A deposit could refer to the wrong account or a receipt not yet banked. The appropriate correction follows the actual event. Rolling an unexplained item forward each month preserves a total without explaining it.
Retain the reconciliation with its support
Keep the statement, the ledger balance used, the outstanding-item list and the posted adjustment references together. The completed schedule should show who prepared it and who reviewed it under the business’s arrangements.
If a difference remains, identify the amount and the transactions still being checked. Do not force agreement with an unexplained balancing journal. The unresolved amount needs to remain visible to the person deciding whether the close is ready for reporting.