With worked example

Bank reconciliationstatement format

The standard two-sided format with a real worked example, the formula explained, and what every line item means.

The standard format

Every bank reconciliation statement has the same two-section structure.

Bank side (left)
Bank statement closing balance
+Deposits in transit
−Outstanding checks
Adjusted bank balance
Book side (right)
Ledger / book closing balance
+Interest earned (on statement)
−Bank service charges
−NSF fees / returned checks
Adjusted book balance

Adjusted bank balance must equal adjusted book balance

If they don't match, there is an error — check for missing transactions, transposition errors, or unrecorded items.

worked example

Bank Reconciliation Statement — December 31

Bank Balance Side

Bank statement closing balance$8420.50
Add: Deposits in transit+$1200.00

Deposit made Dec 31, not yet posted

Less: Outstanding checks−$890.75

Check #1042 issued Dec 28, not cleared

Less: Outstanding checks−$340.00

Check #1043 issued Dec 30, not cleared

Adjusted bank balance$8389.75

Book Balance Side

Book (ledger) closing balance$8512.25
Add: Interest earned+$12.50

Bank credited interest, not in books

Less: Bank service charge−$15.00

Monthly fee, not recorded in books

Less: NSF returned check fee−$120.00

Customer check bounced

Adjusted book balance$8389.75

✓ Adjusted bank balance ($8389.75) = Adjusted book balance ($8389.75) — Reconciled!

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Bank reconciliation statement FAQ

What is a bank reconciliation statement?+−
A bank reconciliation statement is a document that shows how your bank balance and book (accounting) balance are reconciled to the same adjusted figure. It lists the starting balances from both sides, adjustments for timing differences (outstanding checks, deposits in transit, bank charges, interest), and arrives at a matching adjusted balance.
What are the two sides of a bank reconciliation statement?+−
A bank reconciliation statement has two sections: (1) Bank side — starts with the bank statement closing balance and adjusts for outstanding checks (subtract) and deposits in transit (add); (2) Book side — starts with your ledger/book balance and adjusts for interest earned (add), bank service charges (subtract), and NSF fees (subtract). Both sides must arrive at the same adjusted balance.
What is the formula for bank reconciliation?+−
Bank side: Bank closing balance + Deposits in transit − Outstanding checks = Adjusted bank balance. Book side: Book closing balance + Interest earned − Bank charges − NSF fees ± Errors = Adjusted book balance. Adjusted bank balance must equal adjusted book balance.
What goes on the bank side of a reconciliation?+−
The bank side starts with the balance shown on your bank statement. You then: ADD deposits in transit (deposits you've recorded but the bank hasn't posted yet), and SUBTRACT outstanding checks (checks you've written but the payee hasn't cashed yet). The result is the adjusted bank balance.
What goes on the book side of a reconciliation?+−
The book side starts with your internal ledger balance. You then: ADD interest earned (shown on bank statement, not yet in your books), SUBTRACT bank service charges (on statement, not in books), SUBTRACT NSF returned check fees, and correct any recording errors. The result is the adjusted book balance.
What is the difference between a bank statement and a bank reconciliation statement?+−
A bank statement is the official document from your bank listing all transactions for a period — it's prepared by the bank. A bank reconciliation statement is a document you prepare to compare your bank statement against your own records and explain any differences.
How do I make a bank reconciliation statement in Excel?+−
Create a spreadsheet with two columns: Bank Balance and Book Balance. Enter the closing balances, then list each adjustment in the appropriate column with + or − signs. Sum to get adjusted balances. Both should match. Use our tool to extract your transactions as CSV first — it makes the process much faster.
Does a bank reconciliation statement need to be signed?+−
For internal business purposes, the preparer should sign and date the reconciliation. For audit purposes, it must also be reviewed and initialed by a supervisor. For personal accounts, a signature isn't required but dating the document is good practice.

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