Balance per Books

Balance per books is another name for the book balance: the balance of the Cash account in a company's own general ledger on a given date. It is the starting figure for the book side of a bank reconciliation, opposite the balance per bank shown on the bank statement.

When the bank statement arrives, it usually shows items the company has not yet recorded. These are the adjustments made to the balance per books in a bank reconciliation, and unlike bank-side items, each one needs a journal entry so that the ledger becomes correct.

• Bank fees and charges. Monthly fees, wire fees and check printing costs are deducted, with a debit to bank service charge expense and a credit to Cash.
• Returned customer checks. A deposited check that bounces is deducted and charged back to the customer's receivable, as described under non-sufficient funds.
• Credits collected by the bank. Interest earned and electronic receipts the company has not yet recorded are added.
• Errors in the company's own records. A check recorded as $540 instead of $450 is corrected by adding back $90.

After these adjustments, the adjusted balance per books should equal the adjusted balance per bank. That agreed figure is the true cash balance reported on the balance sheet.