Glossary
Bank reconciliation
Definition
Comparing your records with the bank statement to make sure balances agree and every transaction is accounted for.
In bookkeeping, bank reconciliation matches transactions in the ledger with those on the statement and explains differences such as outstanding checks or deposits in transit.
Statement conversion uses a related check: confirming that opening balance plus all extracted transactions equals the closing balance, which proves the extraction is complete.
Related terms
- Opening balance
The account balance at the start of the statement period, also called beginning, previous or brought-forward balance.
- Closing balance
The account balance at the end of the statement period, also called ending, new or carried-forward balance.
- Outstanding check
A check you've written and recorded that hasn't yet cleared the bank, so it's not on the statement.
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