What is Balance per Books?

Balance per books is the ending balance of an account that appears in the general ledger. The concept is commonly used in regard to the ending cash balance, which is then compared to the cash balance in the monthly bank statement as part of a bank reconciliation.

Example of Balance per Books

A business records an initial balance per books of $12,500. This represents the cash balance recorded in the company’s general ledger for a bank account. However, this balance may differ from the bank statement balance due to timing differences or errors. Here is a breakdown of adjustments that might be made during a reconciliation process:

Adjustments:

Additions:
- Interest earned on account: $50
- Customer payment deposited directly to the bank (not yet recorded in the books): $200
Deductions:
- Bank service fee: $25
- Check #1024 issued to a vendor but not yet cleared by the bank: $1,500

Reconciled Balance:

Balance per books: $12,500

Additions: $250

Deductions: $1,525
Reconciled Balance: $11,225

This reconciled balance should match the bank statement after adjustments for timing differences and errors are accounted for. If there is still a discrepancy, further investigation would be required.

Balance per Books vs. Bank Balance

The balance per books is the ending balance in the accounting records of an organization, while the bank balance is the ending cash balance in an organization’s bank account, according to its bank. These two balances are rarely the same, due to such adjusting items as uncashed checks, deposits in transit, and bank account fees.