What is bank balance and book balance?

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The term bank balance is commonly used when reconciling the bank statement. It is also known as the balance per bank or balance per bank statement.

What is the Book Balance?

An accrued expense is recognized on the books before it has been billed or paid.

Therefore, a $345 debit is made to increase the accounts receivable balance of Hosta, Inc., and a $345 credit is made to decrease cash. Companies may authorize a bank to automatically transfer funds into or out of their account. Automatic withdrawals from the account are used to pay for loans , monthly utility bills, or other liabilities. Automatic deposits occur when the company’s checking account receives automatic fund transfers from customers or other sources or when the bank collects notes receivable payments on behalf of the company. The ending balance on a bank statement almost never agrees with the balance in a company’s corresponding general ledger account.

Book balance definition

Ensuring an accurate book balance can help companies manage the monthly cash flow activities, which includes cash coming in and cash being paid out from the company. Since the Vector Management Group paid Ad It Up $63 more than the books show, a $63 debit is made to decrease the accounts payable balance owed to Ad It Up, and a $63 credit is made to decrease cash. Although separate journal entries for each expense can be made, it is simpler to combine them, so bank fees expense is debited for $70 and cash is credited for $70. Is your checkbook balance higher or lower than your statement?