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Introduction

The purpose of an account reconciliation reconciliation is to confirm that the account balance is accurate, valid, and complete. An A reconciliation compares needs to compare the General Ledger account balance between the General Ledger and the with an outside source. Any outstanding items (unmatched) should be researched to determine if an Adjusting Journal Entries Entry (AJE) is necessary.

Example: Use Tax Account Reconciliation

Account balance for the

Simply defined, an Account Reconciliation is a comparison between an account balance according to the General Ledger or Trial Balance and what Authoritative Supporting Documentation (ASD) tells us the account balance should be, and a detailed explanation for any differences between the two. Account Reconciliations often determine any Adjusting Journal Entries (AJE) necessary to ensure that account balances are fairly stated. Account Reconciliations are to be performed for Balance Sheet/Statement of Financial Position accounts that represent asset or liability balances to be presented at a point in time, most commonly at month-end or fiscal year-end dates.

The most accessible example of an Account Reconciliation is a Bank Reconciliation (bank rec). The relevant components of a bank rec are the Trial Balance (TB) for a Cash account at a period-end date, General Ledger detail for the Cash account, and the bank statement to serve as ASD.

The Cash account balance per the TB is compared with the account balance per the bank statement, and the resulting difference is attributed to a combination of reconciling items, which represent differences between the two sources. The GL Accounting team is responsible for determining whether those differences should be included in the GL balance to fairly state the Cash balance based on the relevant accounting assertions to Cash (Existence, Accuracy, and Cut-off), meaning the Cash exists, the total balance is accurate, and its activity is recorded solely to the appropriate period.

Examples of reconciling items in a bank reconciliation are:

• Outstanding Checks: checks written by the University to vendors, employees, contractors, debt-holders, etc. that have been taken out of the Cash balance in the GL, but aren’t yet cleared, so they haven’t been reflected in the bank statement. This represents a timing difference that requires no adjustment.

• Deposits-in-Transit: Deposits brought to the University’s Treasury Accountant in cash, checks, or ACH transactions that have been reported on the GL, but not yet reflected in the bank statement. This represents a timing difference that requires no adjustment.

• Bank Fees: Fees assessed by the bank and reported on the bank statement that haven’t yet been reflected on the GL, and should result in an AJE to reflect those fees on the GL.

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Example: Bank Account Reconciliation

Account balance for the bank account is as follow:

General Ledger:

Bank Statement:

Account Reconciliation Template:

While Finance prepares most reconciliations in accordance with the timetable below, some Departments have responsibility for preparing reconciliations. Finance will reach out to Departments who should be preparing reconciliations and is happy to provide additional training where required.

Although the nature of the account will dictate the contents of the reconciliation, the purpose of the account reconciliation is to prove the GL account balance is correct, or to show how to correct it.

Below lists the expected reconciling frequency for different account types.

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Find the GL Accounts that belong to your organization in the reconciliations list below. From here, you can filter for your department to find which accounts whose reconciliations you own and the frequency to prepare them.

For each account reconciliation your department owns, please save your reconciliation within one week of month-end close (refer to the Month-End Close Schedule).

Please reach out to generalledger@spu.edu with any questions.