TIP: A bank memorandum is often called a bank memo. A depositor's checking account is a liability on the bank's books, so a bank debit memo decreases the depositor's cash balance and a bank credit memo increases the depositor's cash balance.
TIP: If you have a checking account, look at the back of your bank statement. A bank often provides a form there to assist you in reconciling your bank account. Very often that form reconciles the cash balance per bank to the cash balance per books rather than reconciling both the bank cash balance and the book cash balance to the adjusted (correct) cash balance. Use of that alternative format is not illustrated in this book.
TIP: The “Adjusted cash balance” caption on a bank reconciliation is often replaced with “Correct cash balance” or “True cash balance.”
TIP: Total receipts per bank for a month include all deposits made by the depositor during the month plus any bank credit memos (such as for interest credited by the bank or a customer's note receivable collected by the bank).
TIP: Total disbursements per bank for a month include all depositor's checks that cleared the banking system during the month plus any bank debit memos originating during the month (such as for bank service charges or a customer's NSF check).
TIP: Beginning cash balance per bank plus total receipts for the month per bank minus total disbursements for the month per bank equals ending cash balance per bank.
TIP: Beginning cash balance per books ...