Month-end close Updated November 2026

Credit card reconciliation

Treat the credit card as a liability account and reconcile it like a bank account: the statement closing balance should equal the ledger balance after charges and payments made after the statement date. Match each charge to a receipt, record fees and interest as expenses, and book the payment as a transfer, not an expense.

Syntax

Ledger card balance = Statement balance + Charges after statement date - Payments after statement date

Part	What it is
`Statement balance`	Closing balance on the card statement (a credit balance in the ledger)
`Charges in transit`	Purchases made before the statement date but posted by the card issuer after it
`Payment`	Dr Credit Card Payable / Cr Cash; not an expense
`Interest and fees`	Dr Interest Expense or Bank Charges / Cr Credit Card Payable

Examples

Statement closing balance 1,850
Charge of 120 made on the 30th, posted by the issuer on the 2nd
Ledger card balance 1,970

Result: 1,850 + 120 = 1,970, reconciled.

Statement shows annual fee 95 and interest 22 not in the ledger

Result: Dr Bank Charges 95 / Dr Interest Expense 22 / Cr Credit Card Payable 117

Payment of 1,850 made from the bank account

Result: Dr Credit Card Payable 1,850 / Cr Cash 1,850. The same 1,850 appears in the bank reconciliation as a cleared payment.

Common mistakes

Recording the card payment as an expense: the expenses were recorded when charged; the payment just settles the liability.
Reconciling to the ledger's own balance: always start from the statement, as with a bank.
Mixing personal charges on a company card: record them as a receivable from the employee, not as expenses.

Practice Credit card reconciliation

These drills check your answer on live data, free, no account needed.

Retail month-endClassify every line, enter both adjusted balances, then choose the journal entry the company must record for each item that affects its books.
Service business closeClassify every line, enter both adjusted balances, then choose the journal entry the company must record for each item that affects its books.

Questions

Is a credit card a bank account in accounting software?

Most software sets it up as a credit card type account that reconciles like a bank account but carries a liability balance.

What if a charge has no receipt?

Record it from the statement description to a suitable expense and flag it for follow-up; missing receipts are a control issue, not a reconciliation difference.

Bank reconciliation stepsThe steps of a bank reconciliation: tick deposits and checks, adjust the bank balance for timing items, adjust the books for bank items, match and post.
Accounts payable reconciliationReconcile accounts payable in two directions: the AP aging to the general ledger control account, and each major vendor statement to the ledger.
Month-end close checklistA month-end close checklist in sequence: cutoff, bank and card reconciliations, AR and AP, accruals and prepaids, fixed assets, balance sheet recs, lock.