School: St.

Vincent of Quebiawan Integrated School Grade Level: 12

Teacher: Angelica H. Paras Semester: First
Learning Area: Fundamentals of Accounting, Business, and Management 2 Quarter: Second Week: 2&3

SELF–INSTRUCTIONAL PACKETS
I. OBJECTIVES
A. Content Standards

The learners demonstrate an understanding of a bank reconciliation statement, its nature and
structure, and reconciling items and methods of preparation

B. Performance Standards

The learners shall be able to solve exercises and problems involving the following
a. Identification of the proper treatment of reconciling items in the bank reconciliation
statement
b. Preparation of a bank reconciliation statement

C. Learning Competencies

The learners…
1. analyzes the effects of the identified reconciling items (ABM_FABM12-IId-12)
2. prepare a bank reconciliation statement (ABM_FABM12-IId-13)

D. Objectives

At the end of the lesson, the learners are expected to:

1. analyze the effects of the identified reconciling items;
2. prepare a bank reconciliation statement

II. CONTENT

Preparation of Bank Reconciliation

III. LEARNING RESOURCES

A. Reference/s (Sanggunian)

Fundamentals of Accountancy, Business, and Management 2 Teacher’s Guide pp. 124-138

Fundamentals of Accountancy, Business, and Management 2 by F. Ong

B. Other Learning Resources (Iba pang Kagamitang Panturo)

IV. PROCEDURES
A. Reviewing previous lesson or presenting the new lesson

Hello there! How was your week? I hope you had a good one.

Did you know that you did great in the previous module? Yes, you read it right!

I am pretty sure that you are now ready to prepare a bank reconciliation statement.

But before that, let’s have a short review on what we have discussed last week to check your
readiness by answering the following questions.

Page 1 of 15
 1
QUICK
CHECK Do these.
A. Can you give 3 reasons why there is a difference between a bank statement
and a company’s accounting period? Write them below.
1.______________________________________________________________________
2.______________________________________________________________________
3.______________________________________________________________________

B. Next, do you still remember the 4 steps in preparing a bank reconciliation? Please write
them below.
1.______________________________________________________________________
2.______________________________________________________________________
3._______________________________________________________________________
4.______________________________________________________________________

B. Establishing a purpose for the lesson

TWO TYPES OF ABM STUDENTS

WHICH ONE ARE YOU?

C. Presenting examples/instances of the new lesson

Because certain items only appear in the company’s book and not in the bank statement or some
items appear in the bank statement but not in the company’s books, the cash balance per book
and the cash balance per bank are not the same. Hence, a bank reconciliation statement is
necessary to bring the balance per books and the balance per bank into agreement.

The most common format of a bank reconciliation statement is shown below.

Page 2 of 15
 We already know that one of the internal control features in every company is the monthly bank
reconciliation. This is done to show that there is no discrepancy between the cash balance per
book records and the cash balance per bank records.

In some cases, there is no need to perform bank reconciliation. But due to timing differences
and errors, the need for such procedure arises.

The following example shows the reason why bank reconciliation should be performed.

In bank reconciliation, two reciprocal accounts will be reconciled. This is the “Cash in Bank”
account from the point of view of the company (ABC Co.) and the “Deposits from ABC Co.”
from the point of view of the bank (BPI). They are called reciprocal accounts because they have
the same balance after all adjustments have been made.

The following transactions were recorded for ABC Company for the month of July 2019.

1. The company received ₱300,000 from a customer. It was deposited in the bank at the end
of the day.
2. The company issued a check worth ₱47,000 to a supplier. It was encashed the day after.
3. At the last day of July, the company received a ₱100,000 payment from a walk-in customer.
Due to a delay in the delivery to the bank, the amount was only credited by the bank on
August 2, 2019.
4. The company issued a check worth ₱92,000 to a creditor. It was only encashed by the
creditor on August 13, 2019.
5. The bank credited ₱400 interest income to the account of ABC Company for the month of
July. The company only knew of this amount upon the receipt of the July bank statement
on August 1, 2019.
6. The bank deducted ₱80 from the account of ABC Company as a 20% withholding tax for
the ₱400 interest income. The company was informed upon the receipt of the bank
statement on August 1, 2019.

The bank reconciliation procedure is much appreciated if step by step transactions is shown,
and that is what will be shown to you. The running balance of the reciprocal accounts is shown
side by side after each transaction was made.

The “Cash in Bank” is the record per company’s books and the “Deposit from ABC Co. is the
record per banks. Cash in Bank Deposit from ABC Co.
(ABC Co.) (BPI)
0 0
At the start, both accounts have zero balance.

1. The company received ₱300,000 from a customer. It was deposited in the bank at the end of
the day.

Both accounts were increased by ₱300,000. The “cash in Cash in Bank Deposit from ABC Co.
(BPI)
bank” account is an asset from the point of view of the (ABC Co.)
0 0
company. The “deposit from ABC Co.” is a liability from the 300,000 300,000
point of view of the bank. At this point, both accounts have the
same balances.

3. The company issued a check worth ₱47,000 to a supplier. It was encashed the day after.

Both accounts were decreased by ₱47,000. ABC Co. paid Cash in Bank Deposit from ABC Co.
(BPI)
(ABC Co.)
their liability by isuing a check to their creditor. When the 0 0
check was immediately encashed by the payee, the bank 300,000 300,000
(47,000) (47,000)
deducted such amount from the balance of ABC Co.

Page 3 of 15
4. At the last day of July, the company received a ₱100,000 payment from a walk-in customer. Due
to a delay in the delivery to the bank, the amount was only credited by the bank on August 2,
2019.

It can now be seen that there is a discrepancy in the ending

balance of the two accounts. This is due to a timing difference.
Cash in Bank Deposit from ABC Co.
The ₱100,000 has already been added by the book, but not (ABC Co.) (BPI)
yet added by the bank as of the last day of July. This amount 0 0
is reconciling item called deposit in transit. This is because 300,000 300,000
(47,000) (47,000)
they only learned the presence of such amount on August 2, 100,000 -
2019. The cut-off for July bank statement is July 31, 2019.
This is one of the items that will be adjusted in the bank
reconciliation.

5. The company issued a check worth ₱92,000 to a creditor. It was only encashed by the creditor
on August 13, 2019.

Another discrepancy in the records arose because of the

₱92,000 check that was issued by the company. The creditor
did not immediately need the money, and as such, encashed Cash in Bank Deposit from ABC Co.
(ABC Co.) (BPI)
it on the succeeding month only. This is the reason why there 0 0
was no ₱92,000 deduction on the records per banks for the 300,000 300,000
month of July. They were only informed of such issuance on (47,000) (47,000)
August 13, 2019. This amount is known as outstanding 100,000 -
(92,000) -
check. This is an amount that has been deducted by the book,
but has not yet been deducted by the bank as of the cut-off
date.

6. The bank credited ₱400 interest income to the account of ABC Company for the month of July.
The company only knew of this amount upon the receipt of the July bank statement on August
1, 2019.

The computation of interest income is usually done by the

bank. They automatically credit the account of the depositor
with the amount of interest income. The depositor would only Cash in Bank Deposit from ABC Co.
become aware of such addition upon receipt of the bank (ABC Co.) (BPI)
statement for the month of July. This is presumably on the first 0 0
few days of the succeeding month (August). This reconciling 300,000 300,000
(47,000) (47,000)
item is called unrecorded bank audits (bank credits/credit 100,000 -
memo). These are items that are already added by the bank, (92,000) -
but have not yet been added by the book as of the cut-off date. - 400
Other credit memos include accounts receivable collected by
the bank in favour of the company and loan proceeds directly
credited by the bank to the account of the customer.

7. The bank deducted ₱80 from the account of ABC Company as a 20% withholding tax for the
₱400 interest income. The company was informed upon the receipt of the bank statement on
August 1, 2019.

Interest income earned in savings deposit is subject to a 20%

final income tax. The banks are mandated by law to
immediately deduct such tax from the interest income earned
by the depositor. This is reflected in the bank records with the Cash in Bank Deposit from ABC Co.
(ABC Co.) (BPI)
₱80 debit to the “deposit from ABC Co. (BPI)” account. Like 0 0
the earlier credit memo, this deduction will only be known by 300,000 300,000
the depositor at a much later time. The depositor will learn of (47,000) (47,000)
such deduction upon the receipt of the bank statement for the 100,000 -
(92,000) -
month. This amount that has been deducted by the bank but - 400
has not yet been deducted per book is called unrecorded - (80)
bank charges (bank debits/debit memo). Other unrecorded
bank charges include bank service charges and customer
NSF checks returned by the bank.
Page 4 of 15
 Assuming that there are no other transactions for the month of July, the reciprocal accounts will
have balances like these:
Deposit from ABC
Cash in Bank
Co.
(ABC Co.)
(BPI)
0 0
300,000 300,000
(47,000) (47,000)
100,000 -
(92,000) -
- 400
- (80)
261,000 253,320
It can be seen that their balances are not the same at the end of July. This is due to the four
reconciling items that we have been discussed. The accountant of the company is now tasked
to reconcile such unadjusted balances.

The following adjustments must be made:

1. Deposits in transit should be added per bank
2. Outstanding checks should be deducted per bank
3. Credit memos should be added per book
4. Debit memos should be deducted per book.
Therefore,

D. Discussing new concepts and practicing new skills #1

Here’s a simple tip: Put the item where it isn't. This means:
o If an item appears on the bank statement (but isn't in the company's general ledger), put
the item on the bank reconciliation under Adjustments to BOOKS

o If an item is already in the company's general ledger Cash account (but it isn't on the bank
statement), put the item on the bank reconciliation under Adjustments to BANK.

Got it? I hope so. So, let us continue.

Assuming the reconciling items for the month of July has already been recorded, the starting
balance for the month of August will now be the same at ₱261,320.

Assume further that the following transactions occurred for the month of August:
1. A cash sale worth ₱500,000 was processed for a customer. The check received from the
customer was immediately deposited to the bank.
2. A notes payable worth ₱150,000 was paid using a check. The payee creditor encashed the
check within the month of August.
3. Another check worth ₱20,000 was issued to a supplier. The supplier only encashed the
check on October 5, 2019.

Page 5 of 15
 4. The bank collected an accounts receivable in favor of the company for ₱50,000. The
company was only notified of such collection in September.
5. A service charge worth ₱3,000 was deducted by the bank from the balance of ABC
Company. The depositor was only informed of such decrease upon the receipt of the August
bank statement on September 5, 2019.
6. The company received ₱49,000 payment from a customer. Due to the negligence of the
treasurer, the bank only received the amount on September 5, 2019.
7. A cash receipt from a customer was correctly recorded by the book as ₱20,000. The bank
teller erroneusly recorded it as ₱2,000 only.
8. The company incorrectly recorded a check payment as ₱5,600 when it should have been
recorded as ₱6,500.
9. The book inadvertently recorder a ₱5,000 cash receipt twice.
10. The bank teller thought that a ₱30,000 check it received was from ABC Company, when
it was in fact from CBA Company. The bank erroneously deducted ₱30,000 from the account
of ABC Company.
The following transactions would have the effects on the book and bank records:
Cash in Bank Deposit from ABC Co.
(ABC Co.) (BPI)
The starting balance for the month of August is the same at 261,320 261,320
₱261,320.

1. A cash sale worth ₱500,000 was processed for a customer. The check received from the
customer was immediately deposited to the bank.
Cash in Bank Deposit from ABC Co.
(ABC Co.) (BPI)
This is the usual effect of a cash receipt that was recorded by 261,320 261,320
the bank in the same month. 500,000 500,000

2. A notes payable worth ₱150,000 was paid using a check. The payee creditor encashed the
check within the month of August.
Cash in Bank Deposit from ABC Co.
(ABC Co.) (BPI)
This is the usual check payment issued by the company that
261,320 261,320
was deducted by the bank within the same month. 500,000 500,000
(150,000) (150,000)

3. Another check worth ₱20,000 was issued to a supplier. The supplier only encashed the check
on October 5, 2019.
Cash in Bank Deposit from ABC Co.
(ABC Co.) (BPI)
The ₱20,000 that was not yet deducted by the bank is the 261,320 261,320
500,000 500,000
outstanding check for the period. (150,000) (150,000)
(20,000) -
4. The bank collected an accounts receivable in favor of the company for ₱50,000. The company
was only notified of such collection in September.
Cash in Bank Deposit from ABC Co.
(ABC Co.) (BPI)
The ₱50,000 that was not yet added by the book is the credit 261,320 261,320
memo for the period. This is the case where in the customer 500,000 500,000
(150,000) (150,000)
directly deposited hius payment for the amount he owes to the (20,000) -
company. - 50,000

5. A service charge worth ₱3,000 was deducted by the bank from the balance of ABC Company.
The depositor was only informed of such decrease upon the receipt of the August bank
statement on September 5, 2019.
Cash in Bank Deposit from ABC Co.
(ABC Co.) (BPI)
The bank service charge in this problem is another example 261,320 261,320
of a bank debit memo. Banks deduct this amount from the 500,000 500,000
(150,000) (150,000)
account of the depositor due to some additional services that (20,000) -
were availed by the company. - 50,000
- (3,000)

Page 6 of 15
6. The company received ₱49,000 payment from a customer. Due to the negligence of the
treasurer, the bank only received the amount on September 5, 2019.
Cash in Bank Deposit from ABC Co.
(ABC Co.) (BPI)
261,320 261,320
The ₱49,000 in this problem is the deposit in transit. The bank 500,000 500,000
(150,000) (150,000)
only knew of such cash receipt on September 5, 2016.
(20,000) -
- 50,000
- (3,000)
49,000 -

7. A cash receipt from a customer was correctly recorded by the book as ₱20,000. The bank teller
erroneusly recorded it as ₱2,000 only.
Cash in Bank Deposit from ABC Co.
(ABC Co.) (BPI)
261,320 261,320
Aside from timing differences, errors may also be the reason 500,000 500,000
why there are discrepancies in the unadjusted book and bank (150,000) (150,000)
(20,000) -
balances. In this case, the bank made an error. - 50,000
- (3,000)
49,000 -
20,000 2,000

8. The company incorrectly recorded a check payment as ₱5,600 when it should have been
recorded as ₱6,500.
Cash in Bank Deposit from ABC Co.
(ABC Co.) (BPI)
261,320 261,320
500,000 500,000
This is an example of a book error. It should be noted that (150,000) (150,000)
both the company and the bank can make errors. (20,000) -
- 50,000
- (3,000)
49,000 -
20,000 2,000
(5,600) (6,500)

9. The book inadvertently recorder a ₱5,000 cash receipt twice.

Cash in Bank Deposit from ABC Co.
(ABC Co.) (BPI)
261,320 261,320
500,000 500,000
(150,000) (150,000)
This is another example of a book error. the accountant of the (20,000) -
company was negligent. - 50,000
- (3,000)
49,000 -
20,000 2,000
(5,600) (6,500)
5,000 5,000
5,000

10. The bank teller thought that a ₱30,000 check it received was from ABC Company, when it was
in fact from CBA Company. The bank erroneously deducted ₱30,000 from the account of ABC
Company.
Cash in Bank Deposit from ABC Co.
(ABC Co.) (BPI)
261,320 261,320
500,000 500,000
This is another example of a bank error. Due to negligence, (150,000) (150,000)
banks sometimes deduct checks that were issued by another (20,000) -
- 50,000
company. - (3,000)
49,000 -
20,000 2,000
(5,600) (6,500)
5,000 5,000
5,000
- (30,000)

Page 7 of 15
 After taking into consideration all of the above transactions, the unadjusted balance of both the
book and the bank can be computed as follows:
Cash in Bank Deposit from ABC Co.
(ABC Co.) (BPI)
261,320 261,320
500,000 500,000
(150,000) (150,000)
(20,000) -
- 50,000
- (3,000)
49,000 -
20,000 2,000
(5,600) (6,500)
5,000 5,000
5,000
- (30,000)
664,720 628,820

The accountant will then perform bank reconciliation procedures as follows:

Aside from the usual procedure on how to correct the timing differences, it should be noted that
the side which made the error should be the one who will make the correction.

E. Discussing new concepts and practicing new skills #2

It was mentioned last week that, to reconcile a bank statement, the account balance as reported
by the bank is compared to the general ledger of a business.

Now, we will prepare a bank reconciliation statement based from the statement account received
from a bank and the general ledger of a business.

Consider the example below.

The following are the transactions of Fidas Merchandising for the month of August.

Aug 5 Fidas Merchandising deposited ₱200,000 in the checking account with Platinum Bank.
7 Bought merchandise from Oats Trading. Issued check no. 005000 in the amount of
₱30,000.
10 Fidas Merchandising deposited ₱50,000 in the checking account.
15 Bought merchandise from various suppliers and issued the following checks:
Payee Check No. Amount
Summer Co. 00501 ₱18,000
Spring Co. 00502 50,000
Winter Trading 00503 40,000
Autumn Enterprises 00504 35,000
Page 8 of 15
 20 Deposited ₱125,000 in the checking account.
25 Purchased merchandise from various suppliers and issued the following checks:
Payee Check No. Amount
Planet Co. 00505 ₱5,000
Star Co. 00506 6,000
Moon Trading 00507 7,000
Sun Enterprises 00508 8,000
29 Issued a check no. 00509 to K9 Merchandising ₱10,000.
31 Deposited ₱123,000 in the checking account.

Presented below is the statement of account received from Platinum bank:

FIGURE 1

Presented below are the amounts entered in the cash receipts book and cash payments book
respectively:
FIGURE 2

Note: In the bank statement, Check no. 33300 in the amount of ₱10,000 is a check issued by
K9 Trading erroneously recorded by the bank under the account of Fidas Merchandising.

Page 9 of 15
 The following is the general ledger balance after adjustments of Fidas Merchandising.

FIGURE 3

These are the steps in preparing the bank reconciliation statement of Fidas Merchandising:
1. Get the ending balance per bank statement furnished by the bank and the ending balance of the
cash in bank account in the general ledger of the company’s books.

The ending balance per bank is ₱344,000

The ending balance per book is ₱324,000 (cash in bank per general ledger FIGURE 3)

2. Compare the deposits credited by the bank in the bank statement against the deposit made by
the company in the cash receipts book.

For deposits appearing both on the bank statement and the cash receipts book, put a small
check mark beside the amounts (just like what is shown in FIGURES 1 & 2).

Check also the deposits in transit of the previous month to see whether they have been credited
by the bank in the current month.

The deposits without check marks represent the deposits in transit. These will be added to the
balance per bank.

For the current month, the Aug. 31 deposit in cash receipts book of ₱123,000 has no check mark
(FIGURE 2) because it did not yet appear on the bank statement.

The Aug. 2 deposit in the amount of ₱10,000 and Aug. 3 deposit in the amount of ₱12,000 (both
marked x in FIGURE 1) are not deposits made in August per cash receipts book. This is because
the ₱10,000 and ₱12,000 credited by the bank are deposits made last July. Hence, these will
be the beginning deposit in transit for the month of August.

Computation for Deposits in Transit

Deposits in Transit, 7/31 ₱22,000
Add: Deposits made per books 498,000
Total amount that should have been deposited ₱520,000
Less: Deposits shown in the bank statement 397,000
Deposits in transit, 8/31 ₱123,000

As mentioned the Aug. 2 deposit of ₱10,000 and Aug. 3 deposit of ₱12,000 (both marked x in
FIGURE 1) are deposits made in July. The amount of ₱397,000 are deposits credited by the
bank per August bank statement which consist of the following:
Aug. 2 ₱10,000
Aug. 3 12,000
Aug. 5 200,000
Aug. 10 50,000
Aug. 20 125,000
₱397,000

Page 10 of 15
3. Compare the checks issued by the company per the cash payments book against the checks
paid or cancelled by the bank per bank statement in the current month.

For checks appearing both on the bank statement (FIGURE 1) and the cash payments book
(FIGURE 2), put a small check mark beside the amounts.

Check also the outstanding checks of the previous month to see whether they have been paid
by the bank in the current month.

The checks without check marks represent the outstanding checks. These will be deducted from
the balance per bank.

Check no. 00506 in the amount of ₱6,000 has no check mark because it did not yet appear on
the August bank statement.

The Aug. 30 check in the amount of ₱15,000 is not a check issued in August per cash payments
book. This is because the ₱15,000 is a check issued last July. Hence, this will be the beginning
outstanding check for the month of August.

Computation for Outstanding Checks

Outstanding checks, beginning of the month ₱15,000
Add: Checks issued per books 498,000
Total checks that should have been cleared ₱224,000
Less: Checks paid by the bank 208,000
Outstanding checks, end of the month ₱16,000

The ₱15,000 is a check issued in July but paid in August. The ₱208,000 are checks paid by the
bank per August bank statement (FIGURE 1) which consist of the following:
Aug. 9 Chk No. 00500 ₱30,000
Aug. 16 Chk No. 00501 18,000
Aug. 17 Chk No. 00502 50,000
Aug. 18 Chk No. 00504 35,000
Aug. 27 Chk No. 00508 8,000
Chk No. 00503 40,000
Aug. 30 Chk No. 00505 5,000
Chk No. 00499 15,000
Aug. 31 Chk No. 00507 7,000

Note: All other items in the bank statement that do not appear in the books are credit memos,
debit memos, NSF checks, bank charges, etc.

Credit memos are added to the book balance while debit memos, NSF checks and bank charges
are deducted from the book balance.

In the case of Platinum Bank, the credit memo represents proceeds of bank loan, and the debit
memo represents the cost of the checkbook.

4. Check for errors made by the bank or errors made by the book in recording transactions.

These errors are either added to or subtracted from the bank balance or book balance depending
on their effect on the balances.

Page 11 of 15
 Errors causing the book or bank balances to be understated will be added to the respective
balance where the error was committed. Likewise, errors causing the book or bank balances to
be overstated will be deducted from the respective balance where the error was made.

In the case of Platinum Bank, Chk No. 333000 of K9 Trading in the amount of ₱10,000 was
erroneously drawn against Fidas Merchandising. This should be added to the balance of Fidas
Merchandising because the error understated the cash balance per bank.

Here is the bank reconciliation of Fidas Merchandising for August 31, 2019.

F. Developing mastery (Leads to Formative assessment)

QUICK
CHECK 2 GOT IT? Do these problems to find out.
Answer the following problem.

The company reported an unadjusted book balance of ₱824,000. The bank statement shows
an unadjusted balance of ₱832,000. The bank credited ₱9,000 to the account of the company
for a bank loan that it has requested. A ₱2,000 bank penalty was deducted. An outstanding
check worth ₱73,000 was not yet recorded by the bank.
1. How much is the adjusted cash balance for the month? ______________
2. How much is the deposit in transit for the month? ______________

G. Finding practical applications of concepts and skills in daily living

There are a number of benefits to reconciling your bank accounts. Whether you review your
banking transactions while having that first cup of coffee each day or carve out 30 to 45 minutes
each week or month, investing that time will pay off.

Page 12 of 15
 Here are some of the benefits of reconciling your bank accounts regularly.

Bank Reconciliations Make Tax Time a Breeze

Instead of dreading tax time because you have 12 months’ worth of transactions to reconcile,
your financial statements will be completely up to date.

Bank Reconciliation Helps Detect Fraud or Discover Other Issues Sooner

Doing a quick daily check on the actual balance is a great way to detect fraud or identify check
clearing or deposit issues. Doing this makes the monthly reconciliation process a breeze
because issues are usually discovered right away.

Bank Reconciliations Give Insight into Your Spending Habits

Believe it or not, reviewing your bank statements will tell you a lot about your spending habits.
Whether it’s looking at how much money you spend on shipping products to customers or the
occasional coffee-and-donut run for the office, it all adds up.

H. Making generalizations and abstractions about the lesson

To sum up our lesson, below is the Bank Reconciliation Procedure:

1. On the bank statement, compare the company’s list of issued checks and deposits to the
checks shown on the statement to identify uncleared checks and deposits in transit.
2. Using the cash balance shown on the bank statement, add back any deposits in transit.
3. Deduct any outstanding checks.
4. This will provide the adjusted bank cash balance.
5. Next, use the company’s ending cash balance, add any interest earned and notes
receivable amount.
6. Deduct any bank service fees, penalties, and NSF checks. This will arrive at the adjusted
company cash balance.
7. After reconciliation, the adjusted bank balance should match with the company’s ending
adjusted cash balance.

I. Evaluating learning

Please see the attached worksheet (pages 14-15)

J. Additional activities for application or remediation

QUICK
CHECK 31.
Answer the following problem.
The company received the bank statement for the month with an unadjusted
balance of ₱544,000. It includes a debit memo worth ₱29,000 and a credit
memo for ₱100,000. The company observed that there is a deposit transit worth
₱20,000 and outstanding checks amounting to ₱34,000.
a. How much is the adjusted cash balance? ______________
b. How much is the unadjusted book balance? ______________

Prepared by: Noted by:

ANGELICA H. PARAS GRACIELA F. SUBALA

Teacher I Principal IV

Reference: DepEd Order No. 42, s. 2016 (Policy Guidelines on Daily Lesson Preparation for the K to 12 Basic Educ. Program)

Page 13 of 15
 FUNDAMENTALS OF ACCOUNTANCY, BUSINESS, AND MANAGEMENT 2 – SECOND QUARTER

WORKSHEET

2 PREPARATION OF BANK
RECONCILIATION
Name__________________________________ Date _______________
Grade and Section________________________ Score_______________
WRITTEN WORK
A. Determine whether the following reconciling items should be added to the book or bank
account balance or deducted from the book or bank account balance by putting a (✓)
checkmark.
DEDUCT DEDUCT
ADD TO ADD TO
RECONCILING ITEMS BOOK
FROM-
BANK
FROM-
BOOK BANK
1. Jodi Dela Cruz Company had a receipt of
Ᵽ100,000 and correctly prepared its bank
deposit slip for Ᵽ100,000. However, the
company recorded the receipt in its Cash
account as Ᵽ101,000. How is the
difference of Ᵽ1,000 handled on the bank
reconciliation?
2. Blaze Mudlong wrote a check worth
Ᵽ46,000, and it cleared the bank for
Ᵽ46,000. However, the company
recorded the receipt in its Cash account
as Ᵽ64,000. How is the difference of
Ᵽ18,000 handled on the bank
reconciliation?
3. Bank erroneously posted another
company’s Credit memo to MN Mitz
Company bank account
4. Bank inadvertently charged Mikka Joson
Company’s bank account for another
Company’s bank fees
5. Bank service charge
6. Deposit in transit
7. The fee charged by the bank for a
returned check
8. Interest credited to the bank account
9. Outstanding checks
10. The bank collected a Note Receivable for
the Acer Garcia Corporation and Credited
the company’s bank account for
Ᵽ1,000,000

Angelica H. Paras | Teacher I

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 FUNDAMENTALS OF ACCOUNTANCY, BUSINESS, AND MANAGEMENT 2 – SECOND QUARTER

WORKSHEET

3 PREPARATION OF BANK
RECONCILIATION
Name__________________________________ Date _______________
Grade and Section________________________ Score_______________
PERFORMANCE TASK
Kayanatin Repairs March 2020 bank statement shown Ᵽ510,000 balance. As of March 31,
2021, accounting records had a cash balance of Ᵽ710,000. Determined the following
information.
a. Kayanatin Repairs issued a check amounting Ᵽ55,000 to a supplier, which not yet presented
to the bank for payment.
b. A deposit slip no. 1234 was a check deposit amounting to Ᵽ305,000, which not yet added to
the company's account.
c. Collection of account receivable amounting to Ᵽ70,000 deposited by a customer directly to
the company's account, which not yet recorded to the company's record.
d. The bank directly takes out Ᵽ20,000 as payment to the company's monthly PLDT bill.
Requirement: Analyze the transactions and prepare the Bank Reconciliation

Solution:
For items a-d, choose your answer from inside the box.

Outstanding check Deposit in Transit Credit Memo Debit Memo

a. The check of Ᵽ55,000 issued to the supplier but not yet encashed is an _________________,
which deducted to the bank cash balance.
b. The check deposited of Ᵽ305,000 but not yet credited to the company's bank account is a
___________________ added to the bank cash balance.
c. The collection of Receivable amounted to Ᵽ70,000 is not yet recorded to the company's cash
balance. Therefore, it should be a _______________ added to the company's book balance.
d. Ᵽ20,000 payment or auto-debit should be deducted to the cash book balance as a
___________________ since the company's had no record of it yet.

Kayanatin Repairs
Bank Reconciliation
For the month ended March 31, 2021
PER BOOK
Unadjusted Book Balance _____________
Add: Credit Memo _____________
Less: Debit Memo _____________
Adjusted Book Balance _____________

PER BANK
Unadjusted Bank Balance _____________
Add: Deposit in Transit (DIT) _____________
Less: Outstanding Checks (OC) _____________
Adjusted Bank Balance _____________

Angelica H. Paras | Teacher I

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