Begin with the closing balance in Bank-
ADD:
1. Deposits in Transit.
2. Any error resulting in a lesser balance at bank.
-wrong credit/ lesser debit.
LESS:
1. Outstanding checks.
2. Any error resulting in a higher balance at bank
-wrong debit / lesser credit.
ADJUSTED BANK ACCOUNT
Begin with closing balance in CASH -
ADD:
1. Direct collection by bank
2. Any error in the book.
LESS:
1. Bank charges- service charges/ check printing charges or any other charges.
2 NSF checks/ fees.
3. Errors.
ADJUSTED CASH BALANCE
The common adjusted balance is then posted in the General Ledger.