1. Identify the bank statement balance of the cash account (balance per bank). VideoBuster is bank balance is $2050
2. Identify and list any unrecorded deposits and any bank errors understating the bank balance. Add them ot the bank balance. VideoBuster is $145 deposit placed in the bank is night depository on October 31 is not recorded on its bank statement.
3. Identify and list any outstanding checks and any bank errors overstating the bank balance. Deduct them from the bank balance. VideoBuster is comparison of canceled check with its books shows two checks outstanding: No 124 for $150 and No. 126 for $200.
4. Compute the adjusted bank balance, also called the corrected or reconciled balance.
5.Identify the company is book balance of the cash account (balance per book). VideoBuster is book balance is $1404.58
6. Identify and list any unrecorded credit memorande from the bank, any interest earned, and errors understating the book balance. Add them to the book balance. VideoBuster is bank statement includes a credit memorandum showing the bank collected a note receivable for the company on October 23. The note is proceeds of $500 (minus a $15 collection fee) are credited to the company is account. VideoBuster is bank statement also shows a credit of $8.42 for interest earned on the average cash balance. There was no prior notification of this item, and it is not yet recorded.
7. Identify and list any unrecorded debit memoranda from the bank, any service charges, and errors overstating the book balance. Deduct them from the book balance. Debits on VideoBuster is bank statement that are not yet recorded include (a) a $23 charge for check printingand (b) an NSF check for #20 plus a related $10 processing fee. (The NSF check is dated October 16 and was included in the book balance.)
8.Compute the adjusted book balance, also called corrected or reconciled balance.
9. Verify that the two adjusted balances from steps 4 and 8 are equal. It so, they are reconciled. If not, check. for accurcy and missing data to achieve reconciliation.