Bank Reconciliation Calculator: Adjusted Bank and Book Balances
Reconcile a bank statement with your books. Adjusts for deposits in transit, outstanding checks, fees, NSF checks, interest and errors, and lists the journal entries to make.
How it works
Adjusted bank balance = bank statement balance + deposits in transit − outstanding checks ± bank errors · Adjusted book balance = book balance + interest + collections by the bank − service charges − NSF checks − automatic debits ± book errors · Reconciled when adjusted bank balance − adjusted book balance = 0
A bank reconciliation explains why the balance on your bank statement differs from the cash balance in your books, then brings both to the same true figure. Some differences are timing: deposits you recorded that the bank has not posted yet (deposits in transit), and checks you wrote that have not cleared (outstanding checks). These adjust the bank side. Other items show on the statement before you know about them: interest, notes the bank collected, service fees, bounced (NSF) customer checks and automatic debits. These adjust the book side, along with any recording errors in your ledger. Paste your deposits in transit and outstanding checks as lists, one amount per line, and enter the book-side items. The calculator totals each side and shows a reconciliation statement in the usual two-column layout. It also lists the journal entries the book-side items need. When the two adjusted balances agree, that figure is the cash to report. If they don’t, it checks the difference for common causes: an item equal to the difference, an item entered with the wrong sign (half the difference), or a transposition error (a difference divisible by 9). The calculator does not match transactions line by line, so tick off the statement against your register first. It is a reconciliation worksheet for small businesses, bookkeepers and accounting students, with no bank connection. No other calculator on the site covers it.
Worked example
The September bank statement shows $27,395. One deposit of $6,700 is in transit, and four checks ($1,000, $650, $200 and $5,500, totaling $7,350) have not cleared. Adjusted bank balance = 27,395 + 6,700 − 7,350 = $26,745. The books show $24,457. Add $3 of interest and a $3,500 note the bank collected. Subtract $505 of fees ($500 collection fee + $5 service charge), a $350 NSF check and a $360 error: check #2005 was recorded as $5,483 but cleared for $5,843. Adjusted book balance = 24,457 + 3,503 − 855 − 360 = $26,745. The difference is $0.00, so the account is reconciled, and $26,745 is the cash balance to report.
Sources: Lumen Learning, Financial Accounting: Bank reconciliation (September worked example, $26,745) · Corporate Finance Institute: Bank reconciliation (XYZ Company example, $270,000) · Omni Calculator: Bank reconciliation (Somo example, $10,314)
Frequently asked questions
What are the steps of a bank reconciliation?
Compare deposits and checks in your books with the bank statement. List the deposits in transit and outstanding checks and adjust the bank balance for them. Adjust the book balance for interest, collections, fees, NSF checks, automatic debits and errors. Confirm the two adjusted balances match, then post journal entries for the book-side items.
Do outstanding checks get added or subtracted?
Subtracted from the bank balance. You already deducted them in your books, but the bank has not paid them yet, so the statement balance is too high by that amount. Deposits in transit are added to the bank balance for the opposite reason.
Where does an NSF check go on a bank reconciliation?
On the book side, as a deduction. You recorded the customer’s check as cash when you deposited it, but the bank returned it unpaid. The journal entry debits accounts receivable and credits cash.
Which items need journal entries?
Only the book-side items: interest, bank collections, service charges, NSF checks, automatic debits and your own recording errors. Deposits in transit and outstanding checks need no entry because the bank will process them later. Bank errors are reported to the bank.
What if my bank reconciliation does not balance?
Look for an item equal to the difference (left out), an item equal to half the difference (wrong sign) or a difference divisible by 9 (transposed digits). Also check last month’s outstanding items and any duplicate entries.
Related calculators
For bookkeeping practice and checking your work. It does not replace your accounting software or advice from an accountant.