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Local Media6674701184734179453
Local Media6674701184734179453
A two-month, 17% P60,000 customer’s note dated October 25, discounted on November 25,
was dishonored on December 25, and the bank charged the company P62,000, which
P1.014_Bank Reconciliation SMC 😊
included a protest fee of P2,000.
c. A customer’s check for P15,400 was entered as P14,500 by both the depositor and the bank
Bank reconciliation but was later corrected by the bank.
The bank reconciliation, when properly prepared, proves that the cash balance per bank and d. Check no. 142 for P12,425 was entered in the cash disbursements journal at P12,245 and
the cash balance per book are in agreement. Periodic bank reconciliations can help identify any check no. 156 for P3,290 was entered as P32,900.
cash errors or irregularities that have occurred in accounting for cash, either by the entity or the
bank. Prepared by an individual who neither handles nor records cash. Most differences in bank e. Bank service charges of P1,830 for December were not yet recorded on the books.
and book balances for cash are “normal” and are the result of temporary timing lags.
f. A bank memo stated that a customer’s note for P25,000 and interest of P1,000 had been
Deposits in Transit - Deposits recorded in the cash account in one period but not received collected on December 28; and the bank charged P500. (No entry was made on the books
by the bank until the next period. when the note was sent to the bank for collection).
Outstanding Checks - Checks written by the company that have yet to be presented at g. Receipts on December 31 for P24,000 were deposited on January 2.
the bank for collection.
h. The following checks were outstanding on Dec. 31:
Bank Charges - Charges by the bank for services that are deducted from the account by No. 123 P3,000 No. 154 P4,000
the bank and which the company learns of when it receives the bank statement. 143 * 2,000 157 6,000
144 7,000 159 7,000
Bank Credits - Collections or deposits in the company's account that the company is not 147 3,000 169 5,000
aware of until receipt of the bank statement. * Certified by the bank in December
Bank or Depositor Errors - Errors made by the company or the bank that must be corrected i. A deposit of P20,000 was recorded by the bank on December 5, but it should have been
for the reconciliation to balance. recorded for Dolor Company rather than Dollar Company.
Forms of bank reconciliation j. Petty cash of P10,000 was included in the Cash in Bank balance.
Two forms of bank reconciliation may be prepared. One form reconciles from the bank k. Proceeds from cash sales of P60,000 for December 18 were stolen. The company expects to
statement balance to the book balance or vice versa. The other form is described as the recover this amount from the insurance company. The cash receipts were recorded in the
reconciliation of bank and book balances to corrected cash balance. This form is composed of books, but no entry was made for the loss.
two separate sections that begin with the bank balance and book balance, respectively.
Reconciling items that apply to the bank balance are added and subtracted to arrive at the l. The December 21 deposit included a check for P20,000 that had been returned on
corrected cash balance. Likewise, reconciling items that apply to the book balance are added December 15 marked NSF. Dollar Company had made no entry upon return of the check.
and subtracted to arrive at the same corrected cash balance. The corrected cash balance is The redeposit of the check on December 21 was recorded in the cash receipts journal of
the amount that should be shown on the balance sheet at the reconciliation date. Dollar Company as a collection on account.