You’ve just received your bank statement in the post. You find your balance at the bank is £1,800 beginning balance, £7,000 in deposits, £6,500 in payments, and your ending balance is £2,300. You review the deposits and find that a deposit of £1,000 does not show on the statement. You find that cheques totaling £2,500 haven’t cleared yet. The balance in your bank account is £1,200. 

Does your bank account reconcile to the balance on your bank statement?

Suppose that you can’t reconcile your bank statement. As you review the cheques, you see one written for £2,500 that you haven’t recorded in your books. As you research the cheque, you find that it’s a payment made to Olive’s Office Supplies. 

How would you record that in the books?

Suppose you can’t reconcile your bank statement and you find that a deposit of £5,300 isn’t recorded. As you research the deposit, you find that the sales receipts weren’t recorded for 15 May. 

How would you record that in the books?