Errors or omissions in the cash book can lead to a difference between the balance as per bank statement and the balance as per cash book. For instance, an entity may incorrectly record the bank deposits or withdrawals in another accounting ledger or it may record the entry by a wrong amount. Likewise, a bank deposit or withdrawal may be completely omitted from the cash book. Such discrepancies would cause the balance shown in the bank statement to be higher or lower than cash book balance depending on the nature of the error or the omission. The difference needs to be eliminated by adjusting the cash book of the company before the preparation a bank reconciliation.