Canada Does cash balance in balance sheet need to be equal to bank statement balance?

[Devin.ca]

I am a new bookkeeper. I am wondering if cash balance in balance sheet has to be equal to bank statement balance. In advance, your help is greatly appreciated.

 

[Fasel Khan]

No it doesnt. You can have open items such as checks not deposited or deposits in transit.

 

[A=L+SE]

Yes, it does. The two balances will differ due to items such as deposits in transit, outstanding checks, debit/credit memos, interest earned, bank service charges, NSFs, and recording errors. However, once the adjustments for these items are made, the balances should be equal.

 

[CygnusTerminal]

The reason you're getting both answers on this topic is that it actually depends on the circumstances: on any given day you'll probably see them varying from one another quite a bit, but you'll also be making adjustments to cash basis that cause them to be equal when non-posted transactions are taken into account.

 

[jmacdougca]

To keep things simple, yes you want your book balance to agree to bank less any outstanding items that will deviate the two balances agreeing.