The reasons for the difference between the balance on the bank statement and the balance on the books consist of;

• Outstanding checks.
• Deposits in transit.
• Bank service charges.
• Check printing charges.
• Errors in the books.
• Errors by the bank.
• Electronic charges on the bank statement are not yet recorded in the books.

What is the danger of not balancing your bank account?

Without balancing your checkbook, you are running the risk that the bank has incorrectly debited (or credited) your checking account or that you have overdrawn your account by writing a check (or setting up an EFT or swiping your card) for which you don’t have sufficient funds.

How many balances are on balancing off accounts?

Balancing off Accounts – After balancing Debit Debit Credit Credit Credit Invoice 1 200 Cash 180 Invoice 2 150 Balance c/d 170 Total 350 Total 350

Why is reconciling your bank account the first step?

Reconciling your bank account each month is step #1 for you if you really want to be successful financially. That’s because your bank statement tells you how much you spend.

Why does my bank statement show a balance of 350?

Your bank statement indicates that you deposited a total of $500 into the account during the month, withdrew and or wrote checks for a total of $350 and have a month-end balance of $250. But when you do your reconciliation, you find that your register shows a balance of $350. Why the $100 discrepancy?

What happens at the end of period 1 balancing off account?

If the sales account above is used as an example, then having balanced off the account at the end of period 1, the account is closed using closing journal entries which transfers the balance to the income statement account and eventually to retained earnings. The account would appear as follows.