Balance as Per Bank
Balance as per bank refers to the end of period balance shown on a bank statement as a result of the transactions made by the company using the banking channel. Payments made to suppliers using banking channel as well as other debits reduce the balance in the bank account while amounts received from customers through the banking channel along with other credits increase the balance in the bank account. Typically, it is the closing balance appearing on the bank statement for a specific month or period.
For example, when a checking account statement is sent by the bank showing August’s activity, the balance shown on 31 August is the balance per bank. Generally, this balance does not agree with the balance appearing in the company’s books as some of the checks issued by the company as well as the checks issued to the company by its customers may not be cleared by bank on August 31 and therefore it is necessary to reconcile the balance per bank with the balance per books as they are seldom the same at any given time.