FA2 Managing Financial Records

Chap 6 Bank Reconciliation

Lecturer: Christine Colon, ACCA

Name:
Group: Date:

Activity 1 - preparing a bank reconciliation (I)

On 31 March 20X3, the balance on the bank ledger account was a debit of $1,042. At the
same date, the bank statement showed a balance of $838. The following was then
discovered:

(a) Bank charges of $24 were shown on the bank statement but had not been
entered into the cheque payments day book.

(b) The cheque payments day book had been undercast by $100.

(c) A standing order payment of $70 appeared on the bank statement but had
been omitted from the cheque payments day book.

(d) Cheques drawn by the organization for $120, $60 and $35 had not yet been
presented at the bank by 31 March and therefore did not appear on the bank
statement.

(e) A cheque receipt from a customer of $225 had been paid into the bank account
on 30 March but did not appear on the bank statement until 3 April.

Prepare the bank reconciliation statement as at 31 March 20X3, and the T-a/c to adjust
the cash book.
Activity 2 - timing differences
The balance on a business's bank ledger account is $1,600 debit. That includes $200 of
cheques that have been drawn but not yet presented to the bank and $350 of deposits
which have not yet appeared on the bank statement. Once these timing differences have
been dealt with the ledger account and bank statement balances agree.

What is the bank statement balance?

Activity 3 - preparing a bank reconciliation (III)
The bank ledger account of a business shows an opening balance of $270 debit, cash
receipts of $4,600 and cash payments of $4,800. There is also a standing order of $40 that
has been omitted from the day books.

The day books include $60 of cheques written but not appearing on the bank and there are
receipts from customers totalling $490 which have been recorded already in the cash
receipts day book but which have not yet been processed by the bank. The bank statement
shows an overdraft of $400.

Prepare the bank reconciliation statement.

Activity 4- preparing a bank reconciliation (IV)

The bank ledger account shows an opening credit balance for the month of June of $399.
The day books for the month show receipts of $3,845 and payments of $5,672. There is also
a bank charge of $85 that has not been recorded in the day books.

The day books include of $1,848 of cheques written but not yet presented and $967 of
deposits banked but not yet cleared. The bank statement shows an overdraft of $1,430.

Prepare the bank reconciliation statement.

Activity 3 - preparing a bank reconciliation (II)
On 31 July 20X7 the balance on Blyth's bank ledger account was a debit of $52 compared
with a credit balance of $134 shown by his bank statement. He discovered the following:

(a) Cheques drawn by Blyth during July, amounting to $356, $1,732 and $196 had
been entered in the day books but had not been presented at the bank by the end
of the month.

(b) Blyth had forgotten to enter into the day books a standing order for $50.

(c) The bank had incorrectly credited Blyth's account with a dividend receipt of $25
relating to another customer.

(d) Bank charges of $105 shown on the bank statement had not yet been entered in
the day books.

(e) Cheques received from customers amounting to $1,211 were entered in the day
books on 31 July but were not credited on the bank statement until 3 August.

(f) Direct credits from customers of$180 and $31 had been paid directly into the
bank, but no entry had been made in the day books.

(g) The cheque payments day book for July had been undercast by $1,000 (this
means that the total is understated by $1,000).

(h) The statement shows an item 'returned cheque $72'. This has not yet been
accounted for in the day books.

Adjust the bank ledger account and prepare the bank reconciliation statement at 31 July
20X7.
Activity 6- recording petty cash transactions

Record the following transactions in the petty cash book and prepare the double-entry to
post the month-end totals into general ledger T accounts.

The balance brought down on the petty cash account on 1 September 20X1 is the imprest
amount of $50.

Day
2 Coffee purchased for $1.89

4 Repair to light switch $12 (including $2 sales tax)

10 Taxi fare $5

15 Pay cleaner $15

25 Repairs $6 (including $1 sales tax)

The imprest float was replenished on 30 September.