CNA L&P - Bank Reconciliation: Bank Mistake

Question: The Bank made a mistake which was reflected on one month's Bank Statement and fixed on the next. How do I record it?

 

Answer: Typically, you will record the Bank's mistake using a Journal Entry. If the Bank mistakenly took too much money, you would Credit the Bank Account for the additional amount. If the Bank mistakenly added too much money, you would Debit the Bank Account for the additional amount. Once you, your Accountant, or your Finance Committee have determined the offsetting account to use for Bank Errors, use this account for the other side of the entry. Since the Bank will correct the mistake, mark the box to Insert Reversing Journal Entry before submitting the Journal Entry. This will automatically create a reversing Journal Entry dated the first day of the next month. The date is editable.

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