If an item is on the books but has not yet appeared on the bank statement (outstanding checks, deposits in transit), the items are entered as an adjustment to the balance per bank statement. Outstanding checks are a deduction to the balance per bank; deposits in transit are an addition to the balance per bank.
If an item is on the bank statement but has not yet been entered on the books, the items are entered as an adjustment to the balance per books. Bank service charges, check printing charges, and other electronic deductions that are not yet recorded on the books are deductions from the cash balance on the books. Electronic deposits not yet on the books are added to the cash balance per books.
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