Final answer:
To calculate the balance of cash using a bank reconciliation, you need to compare your transactions with your bank statement, identify discrepancies, and adjust your own record accordingly before reconciling the balances.
Step-by-step explanation:
To calculate the balance of cash using a bank reconciliation, follow these steps:
- Gather your bank statement and your own record of transactions.
- Compare the transactions on your bank statement against your own records.
- Identify any discrepancies, such as outstanding checks or deposits that haven't cleared.
- Adjust your own record to account for these discrepancies.
- Reconcile the adjusted balance on your own record with the ending balance on your bank statement.
- Calculate the difference between the adjusted balance and the ending balance. This is the balance of cash.