# Bank Reconciliation Practice Problems With Solutions

- Author: PreciseBankFlow (https://precisebankflow.com)
- Published: 2026-10-17
- Category: Bank reconciliation
- Canonical: https://precisebankflow.com/blog/bank-reconciliation-practice-problems

> Bank reconciliation practice problems with full solutions: five graded exercises covering timing items, errors, NSF checks and an overdraft, plus answers.
These bank reconciliation practice problems run from easy to hard: timing items only, a ledger error, an NSF check, an overdraft and a mixed month with a bank error. Each gives the data first and the full solution after, with the journal entries. Work each on paper before reading the answer, then test it with the proof at the end.

## Practice problem 1: deposits in transit and outstanding checks

Problem 1 tests only the bank side. Every difference between the statement and the ledger is a timing item, so the bank figure moves and the book figure does not, and no journal entry is needed. The solution is one short calculation. All names and figures in these problems are invented for practice.

### Problem 1 data

Maple Row Bakery, 30 June:

- Balance per bank statement: 6,480.00
- Balance per books: 6,224.50
- A deposit of 1,250.00 made on 30 June does not appear on the statement.
- Checks 301 (410.00), 304 (975.50) and 305 (120.00) have not cleared.

Prepare the reconciliation.

### Problem 1 solution

| Bank side | Amount | Book side | Amount |
| --- | ---: | --- | ---: |
| Balance per bank | 6,480.00 | Balance per books | 6,224.50 |
| Add: deposit in transit | 1,250.00 | | |
| Less: outstanding checks (301, 304, 305) | (1,505.50) | | |
| Adjusted bank balance | 6,224.50 | Adjusted book balance | 6,224.50 |

The three checks add to 1,505.50. Then 6,480.00 plus 1,250.00 is 7,730.00, and 7,730.00 less 1,505.50 is 6,224.50. Both sides agree with no book adjustments, so there are no journal entries. If you put the deposit or the checks on the book side, go back to the rule: the ledger already has them, so only the bank figure needs correcting.

## Practice problem 2: a check recorded at the wrong amount

Problem 2 adds one ledger error. A check was written for one amount and entered for another, so the book side needs a correction as well as the usual timing items on the bank side. The size of the error is also a clue worth spotting.

### Problem 2 data

Corbett Joinery, 31 July:

- Balance per bank statement: 12,300.00
- Balance per books: 10,978.00
- Deposit in transit: 800.00
- Outstanding checks total: 2,140.00
- Check 518, to the electricity supplier, was written and paid for 386.00 but recorded in the ledger as 368.00.

Prepare the reconciliation and the journal entry.

### Problem 2 solution

| Bank side | Amount | Book side | Amount |
| --- | ---: | --- | ---: |
| Balance per bank | 12,300.00 | Balance per books | 10,978.00 |
| Add: deposit in transit | 800.00 | Less: error on check 518 (386.00 less 368.00) | (18.00) |
| Less: outstanding checks | (2,140.00) | | |
| Adjusted bank balance | 10,960.00 | Adjusted book balance | 10,960.00 |

The ledger recorded 18.00 too little expense and so kept 18.00 too much cash. The correcting entry is a debit to utilities expense of 18.00 and a credit to cash of 18.00. Notice that 18 divides evenly by 9: swapping two adjacent digits always produces a difference that is a multiple of nine, which makes it a fast first guess when a reconciliation is off.

## Practice problem 3: an NSF check with a returned-item fee

Problem 3 puts three items on the book side. A customer's check bounced, the bank charged a fee for returning it, and the monthly service charge also hit the account. All three reduce the book balance, and the bounced check goes back to the customer's receivable rather than to an expense.

### Problem 3 data

Linden Garden Supplies, 31 August:

- Balance per bank statement: 4,915.00
- Balance per books: 6,352.00
- Deposit in transit: 1,600.00
- Outstanding checks total: 730.00
- A 540.00 check from customer R. Haines, deposited on 20 August, was returned unpaid.
- The bank charged 12.00 for the returned item.
- The monthly service charge was 15.00.

Prepare the reconciliation and the journal entries.

### Problem 3 solution

| Bank side | Amount | Book side | Amount |
| --- | ---: | --- | ---: |
| Balance per bank | 4,915.00 | Balance per books | 6,352.00 |
| Add: deposit in transit | 1,600.00 | Less: NSF check, R. Haines | (540.00) |
| Less: outstanding checks | (730.00) | Less: returned item fee | (12.00) |
| | | Less: service charge | (15.00) |
| Adjusted bank balance | 5,785.00 | Adjusted book balance | 5,785.00 |

Bank side: 4,915.00 plus 1,600.00 is 6,515.00, less 730.00 is 5,785.00. Book side: 6,352.00 less 540.00, 12.00 and 15.00 (567.00 in all) is 5,785.00.

Journal entries:

- Debit accounts receivable, R. Haines, 540.00; credit cash 540.00.
- Debit bank service charges 12.00; credit cash 12.00 (or debit the customer, if your terms pass the fee on).
- Debit bank service charges 15.00; credit cash 15.00.

## Practice problem 4: a bank account overdrawn at month-end

Problem 4 starts from negative balances on both sides. The method does not change: add and subtract the same items as always, and keep the signs straight. The adjusted figure is an overdraft, which belongs with liabilities on the balance sheet rather than with cash.

### Problem 4 data

Hollis Event Hire, 30 September:

- Balance per bank statement: overdrawn by 1,320.00
- Balance per books: overdrawn by 1,930.00
- Deposit in transit: 400.00
- Outstanding checks total: 1,045.00
- The bank charged an overdraft fee of 35.00, not yet recorded.

Prepare the reconciliation and the journal entry.

### Problem 4 solution

| Bank side | Amount | Book side | Amount |
| --- | ---: | --- | ---: |
| Balance per bank | (1,320.00) | Balance per books | (1,930.00) |
| Add: deposit in transit | 400.00 | Less: overdraft fee | (35.00) |
| Less: outstanding checks | (1,045.00) | | |
| Adjusted bank balance | (1,965.00) | Adjusted book balance | (1,965.00) |

Bank side: minus 1,320.00 plus 400.00 is minus 920.00, and minus 920.00 less 1,045.00 is minus 1,965.00. Book side: minus 1,930.00 less 35.00 is minus 1,965.00.

The entry is a debit to bank service charges of 35.00 and a credit to cash of 35.00, which makes the ledger overdraft 1,965.00. The commonest slip here is to add the deposit in transit in the wrong direction because the balance is negative. Write the opening figure with its minus sign, then apply each item exactly as you would to a positive balance.

## Practice problem 5: a mixed month with a bank error

Problem 5 combines everything: timing items, a bank error, fees, interest, an unrecorded customer payment and a deposit entered at the wrong amount. The test is sorting each item to the right side. Bank errors adjust the bank figure; anything your own ledger got wrong or missed adjusts the book figure.

### Problem 5 data

Westbury Print Studio, 31 October:

- Balance per bank statement: 18,742.60
- Balance per books: 17,508.00
- Deposit in transit: 2,315.00
- Outstanding checks total: 3,480.25
- The bank charged a 600.00 check written by another company to Westbury's account.
- Service charge: 40.00. Interest credited: 9.35.
- A customer, Fairlane Books, paid 1,150.00 by bank transfer. It is on the statement but not in the ledger.
- A deposit of 1,490.00 was entered in the ledger as 1,940.00.

Prepare the reconciliation and the journal entries.

### Problem 5 solution

| Bank side | Amount | Book side | Amount |
| --- | ---: | --- | ---: |
| Balance per bank | 18,742.60 | Balance per books | 17,508.00 |
| Add: deposit in transit | 2,315.00 | Add: transfer from Fairlane Books | 1,150.00 |
| Add: check charged in error | 600.00 | Add: interest | 9.35 |
| Less: outstanding checks | (3,480.25) | Less: service charge | (40.00) |
| | | Less: deposit overstated (1,940.00 less 1,490.00) | (450.00) |
| Adjusted bank balance | 18,177.35 | Adjusted book balance | 18,177.35 |

Bank side: 18,742.60 plus 2,315.00 is 21,057.60, plus 600.00 is 21,657.60, less 3,480.25 is 18,177.35. Book side: 17,508.00 plus 1,150.00 is 18,658.00, plus 9.35 is 18,667.35, less 40.00 is 18,627.35, less 450.00 is 18,177.35.

Journal entries, four in all:

- Debit cash 1,150.00; credit accounts receivable, Fairlane Books, 1,150.00.
- Debit cash 9.35; credit interest income 9.35.
- Debit bank service charges 40.00; credit cash 40.00.
- Debit the account the deposit was credited to (here, accounts receivable) 450.00; credit cash 450.00.

The 600.00 bank error gets no entry. Ask the bank to reverse it and keep the request with the reconciliation until it appears on November's statement.

## How do you check a bank reconciliation practice answer?

Check a bank reconciliation answer with two proofs that do not depend on the answer key. First, the net of all reconciling items must equal the starting gap between the bank and book balances. Second, the net of your journal entries must move the book balance exactly to the adjusted figure. If both hold, the answer is right.

Apply the first proof to problem 5. The starting gap is 18,742.60 less 17,508.00, which is 1,234.60, with the bank higher. Bank-side items that lower the bank figure, and book-side items that raise the book figure, both close that gap:

| Item | Effect on the gap |
| --- | ---: |
| Deposit in transit (bank lacks it) | (2,315.00) |
| Check charged in error (bank wrongly lower) | (600.00) |
| Outstanding checks (bank lacks them) | 3,480.25 |
| Transfer from Fairlane Books (books lack it) | 1,150.00 |
| Interest (books lack it) | 9.35 |
| Service charge (books lack it) | (40.00) |
| Deposit overstated in the books | (450.00) |
| Net | 1,234.60 |

The net equals the gap, so every item has been counted once on the correct side. For the second proof, the four entries net to plus 669.35, and 17,508.00 plus 669.35 is 18,177.35, the adjusted figure.

To keep a copy for revision, print this page to PDF from your browser; the tables keep their layout. For a full month with a narrative around the numbers, see [a bank reconciliation example worked line by line](/blog/bank-reconciliation-example-worked).

## Which practice problem errors trip people up most?

Most wrong answers come from four errors: putting an item on the wrong side, applying the wrong sign, booking entries for timing items, and booking an entry for a bank error. Each leads to a reconciliation that fails to agree or agrees for the wrong reason. Deciding the side of every item before any arithmetic avoids most of them.

- **Wrong side.** An NSF check placed on the bank side. Ask who has not recorded the item yet. The bank already reversed the check, so the books are behind.
- **Wrong sign on a negative balance.** In problem 4, adding 400.00 to minus 1,320.00 gives minus 920.00, not minus 1,720.00.
- **Entries for timing items.** No entry is ever needed for a deposit in transit or an outstanding check. Booking one makes next month's reconciliation wrong.
- **Entries for bank errors.** The 600.00 in problem 5 is the bank's problem. The ledger was right.

Real reconciliations add a fifth trap: forcing a stubborn difference to zero with an unexplained adjustment. A practice problem always has a clean answer; a real account that keeps needing a small plug may be hiding something. [How bookkeeper embezzlement is concealed](/blog/bookkeeper-embezzlement) shows why an adjustment nobody can explain deserves a closer look.

Once these feel routine, try the variations that come up in practice. The twelfth month adds cut-off tests and audit support, set out in [the year-end bank reconciliation](/blog/year-end-bank-reconciliation). A volunteer-run account adds designated funds and committee review, covered in [church bank reconciliation for treasurers](/blog/church-bank-reconciliation). For when each month's reconciliation should be finished, read [monthly bank reconciliation deadlines](/blog/monthly-bank-reconciliation-deadlines). In practice the slow part is not the arithmetic but listing what cleared; [PreciseBankFlow](/) produces that list from the statement so the judgment calls are what is left.