What is a common adjustment made during bank reconciliation?

During a bank reconciliation, one important adjustment made is subtracting bank fees. This process involves comparing the company's cash balance as per its own records with the cash balance shown in the bank’s records.

Bank fees, such as monthly service charges or transaction fees, are often not recorded in the company’s general ledger. Therefore, these fees must be deducted from the bank statement balance to arrive at the true cash balance available to the company. This adjustment ensures that the company’s records accurately reflect the amount of cash that it has available to use.

In contrast, adding unpaid bills is not a reconciliation adjustment; instead, this pertains to accounts payable and is recorded on the company's books. Including sales tax collected relates to revenue recognition and does not directly impact the reconciliation of cash balances. Likewise, adding depreciation expense is a non-cash accounting entry that affects net income rather than the cash balance needed for reconciliation purposes. Thus, subtracting bank fees is a crucial adjustment for maintaining accurate financial records during the reconciliation process.