Bank Balance and Book Balance

The terms bank balance and book balance are used in the accounting and bookkeeping procedure known as reconciling the bank statement.

 The bank balance is also known as the balance per bank or balance per bank statement and it refers to the ending balance appearing on a bank statement. For example, when a company receives its June checking account statement from its bank, the April 30 balance will be the bank balance. Usually this bank balance will not agree with the amount in the company’s records since some checks written by the company will not have cleared the checking account by April 30. Similarly, some money received by the company on June 30 may not have been deposited in time for the amount to appear on the June bank statement.

 In the bank reconciliation the term book balance may be referred to as the balance per books, and it is the amount shown in the company’s records. For example, the book balance at April 30 refers to the balance in the company’s general ledger account Cash or Checking Account. Often the book balance at April 30 will not be the true amount until some items on the bank statement are recorded. For example, the June bank statement may reveal some bank fees that were withdrawn by the bank at the end of June.