What is BRS (Bank Reconciliation statement )

A bank reconciliation statement is a summary of banking and business activity that reconciles an entity’s bank account with its financial records. The statement outlines the deposits, withdrawals, and other activity impacting a bank account for a specific period. A bank reconciliation statement is a useful financial internal control tool used to thwart fraud.

The differences may arise because of the following reasons:

  v Cheques deposited into bank but not yet collected by bank

 

  v Cheques issued by the organization but not yet presented for payment

  v Cheques directly deposited by customers into the bank

 

  v Bank charges debited by bank

  v Interest credited or some receipts directly collected by bank based on org. request.

  v Some payments directly made by bank based on the organizations request.

So, the statement shows the reasons as what are the reasons for difference in balance.