what is the actual process of making bank reconciliation statement with a practical example?

Answer 1

Click on the 1st link, then click on Bank Reconciliation in the green panel for a step by step tutorial with illustration. Just keep scrolling down.

For another write-up with illustration, click on the 2nd link.

Answer 2

a bank reconciliation statement is prepared in order to reconcile the bank statement balance (bank) from the cash book balance (company). there are many reconciling items that are needed to be considered. Like deposits in transit and outstanding checks.
Deposits in transits are added to the bank balance because these represent deposits near a cut-off period that are deposited by the company that is not yet appearing in the bank statement. on the other hand, outstanding checks are checks written by the company against its account that the payees (creditors) have yet to en-cash the check as of the cut-off date. that's some of the reconciliation items for the bank. For the books, there are bank charges that appears in the bank statement (deduction) that is never recorded in the books of the company, so it is deducted. so that's a preview of bank reconciliation. the essence of the bank reconciliation statement is to make the bank balance to agree with the book balance as of a particular date, let's say balance sheet date.

Answer 3

U might have deposited a cheque on the last day of the month & can't expect Bank to give credit on the same day whereas U might hv accounted in your Books & cheque issued in vice versa will also not reflect in your bank statement and affect the balance. So also bank charges U came to know only after seeing the Statement..

Answer 4

Bank balance according to your statement + outstanding deposits (not yet posted on your statement) - outstanding checks (checks that have not yet cleared your account) = general ledger (your checkbook) balance.