Banks sometimes make mistakes by depositing or withdrawing incorrect amounts to bank accounts... Reconciling Corrections and Adjustments to Bank Errors Correcting bank errors using the reversal and adjustment method are described in the following example...
What methods do banks use to resolve errors?
Banks resolve errors using two methods: reversal and adjustment. In the reversal method, the bank reverses the entire error transaction amount so that the error entry and the reversal entry net out to zero, and then makes another transaction entry for the correct transaction amount. In the adjustment method, the bank creates an additional transaction entry to make up for the difference between the original transaction amount and the error entry. Banks resolve errors using two methods: reversal and adjustment. In the reversal method, the bank reverses the entire error transaction amount so that the error entry and the reversal entry net out to zero, and then makes another transaction entry for the correct transaction amount. In the adjustment method, the bank creates an additional transaction entry to make up for the difference between the original transaction amount and the error entry. Banks resolve errors using two methods: reversal and adjustment. In the reversal method, the bank reverses the entire error transaction amount so that the error entry and the reversal entry net out to zero, and then makes another transaction entry for the correct transaction amount. In the adjustment method, the bank creates an additional transaction entry to make up for the difference between the original transaction amount and the error entry.