If a check correctly written and paid by the bank for $118 is incorrectly recorded in the company's books for $181, this can be corrected as adding $63 in the Cash Book balance.
Bank Reconciliation is the reconciling of the bank statement and cash book. The difference is the transactions that are omitted in the cash book, the transactions that are recorded with wrong amount in the cash book and the transactions that ae pending on the bank and will be settled on a future date.
As the check that was paid by the bank is written correctly but incorrectly recorded as a greater amount. The differential amount is to be deducted from the Cash book to correct the error and tie the balance. This correction will correct the balance of the cash book maintained by the company and the ending or closing balance of the bank account will be matched.
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