NAME: Angelica Franscine P.

gomez 04/01/2022

ABM12-Y1-1

ENGAGE

9.1 TRUE OR FALSE

True or False. Write True if the statement is wrong, and False if the statement is correct.

Write the answer before the number.

FALSE 1. A bank Savings Account earns interest income.

TRUE 2. Bank issues a passbook for a Current Account.

TRUE 3. There is no maintaining minimum balance for a Checking Account.

FALSE 4. An ATM Card can be used as payment for purchases.

TRUE 5. Deposit slip is used to withdraw money from a bank account.

TRUE 6. Withdrawal slip is used to deposit money to the depositor's account.

FALSE 7. Anyone could deposit to anyone's bank account.

TRUE 8. Anyone could withdraw from person's bank account.

TRUE 9. Bank statement is a document prepared by the depositor.

TRUE 10.A check is considered as cash.

FALSE 11.A company can use check as form of payment.

FALSE 12. Time deposit earns interest higher than savings and current accounts.

TRUE 13.A passbook can be used to withdraw money from an ATM.

TRUE 14. All transactions must be done in the bank premises.

FALSE 15. Bank Statement could be downloaded in an online banking system.

TRUE 16. In a Bank Reconciliation, adjusted bank balance must not be equally with adjusted book

balance.

TRUE 17. Interest Income from bank is a bank debit.

FALSE 18. Interest Income from bank is a bank credit.

TRUE 19. Bank service charge is bank credit

FALSE 20. Bank service charge is bank debit.

TRUE 21. Book errors must be adjusted by the bank.

FALSE 22. Bank errors must be adjusted by the bank.

TRUE 23. NSF check means check with sufficient funds.

TRUE 24. Deposits in transit are cash recorded by the bank but not yet recorded in the books.

FALSE 25. Deposits in transit are cash recorded in the book but not yet recorded by the bank.

TRUE 26. Outstanding checks are checks already recorded by the bank but not yet recorded in the

books.

FALSE 27. Outstanding checks are checks already recorded in the books but not yet recorded by the

bank.

FALSE 28. Erasure is allowed in a check provided it is countersigned by the depositor.

FALSE 29. Bank debits include NSF Check.

TRUE 30. Bank Service Charge is an income of the depositor.

EXPLORE

9.2 MULTIPLE CHOICE

1. Which of the following would be added to the balance per bank statement to arrive at the

correct cash balance?

a. Deposits in transit

b. Outstanding check

c. Bank service charge

d. A customer note collected by the bank on behalf of the depositor

2. Bank reconciliations are normally prepared on a monthly basis to identify adjustments

needed in the depositor’s records and to identify bank errors. Adjustments on the part of

the depositor should be accounted for

a. Outstanding checks and deposits in transit.

b. Bank errors, outstanding checks and deposits in transit.

c. Book errors, bank errors, outstanding checks and deposits in transit.

d. All items except bank errors, outstanding checks and deposits in transit.

3. Which of the following items must be added to the cash balance per ledger in preparing a

bank reconciliation which ends with adjusted cash balance?

a. Service charge

b. NSF customer check

c. Erroneous bank debit

d. Note receivable collected by bank in favor of the depositor and credited to the account of the
depositor.

4. Which statement in relation to a certified check is not true?

a. A certified check is a liability of the bank certifying it.

b. A certified check is one drawn by a bank upon itself.

c. A certified check should not be included in the outstanding checks.

d. A certified check will be accepted by many persons who would not otherwise accept

a personal check.

5. A bank reconciliation is

a. A merger of two banks that previously were competitors.

b. A statement sent by the bank to depositor on a monthly basis.

c. A schedule that accounts for the difference between cash balance shown on the bank statement and
the cash balance shown on the general ledger.

d. A financial statement that lists all of the bank account balances of an entity.

6. In preparing the bank reconciliation for the month of August, Yami Company provided the

following information:

Balance per bank statement ₱1,805,000

Deposits in transit 325,000

Return of customer check for insufficient fund 60,000

Outstanding checks 275,000

Bank service charge for August 10,000

What is the adjusted cash in bank?

a. ₱1,755,000

b. ₱1,785,000

c. ₱1,795,000

d. ₱1,855,000

7. Straw Hat Company provided the following data for the purpose of reconciling the cash

balance per book with the cash balance per bank statement on December 31:
Balance per book ₱850,000

Balance per bank statement 2,000,000

Outstanding checks, including certified check of ₱100,000 500,000

Deposits in transit 200,000

December NSF checks, of which ₱50,000 had been redeposited and cleared on

December 27 150,000 Erroneous credit to Straw Hat’s account, representing proceeds of

loan granted to another company 300,000. Proceeds of note collected by bank for

Straw Hat, net of service charge of ₱20,000 750,000

What amount should be reported as cash in bank at year-end?

a. ₱1,400,000

b. ₱1,450,000

c. ₱1,500,000

d. ₱1,800,000

8. Yuno Company provided the following information for the month of December:

Balance per bank statement December 31 ₱2,800,000

Deposits made but not yet recorded by the bank 350,000

Interest paid by bank to Yuno Company for December 10,000

Checks written but not yet recorded by the bank 650,000

Bank service charge for December 12,000

The entity discovered that it had drawn and erroneously recorded a check for ₱46,000

that should have been ₱64,000. What is the cash balance per ledger on December 31?

a. ₱2,800,000

b. ₱2,540,000

c. ₱2,520,000

d. ₱2,500,000

ANSWER:

9. Mar Company kept all cash in a checking account. An examination of the accounting records and bank
statement for the month of December revealed a bank statement balance of P8, 469,000 and a book
balance of P8, 524,000
A deposit of P950, 000 placed in the bank’s night depository on December 29 does not appear on the
bank statement.

Checks outstanding on December 31 amount to P270, 000.

The bank statement showed that on December 25 the bank collected a note for Mar Company and
credited the proceeds of P935, 000 to the entity’s account which included P35, 000 interests.

Mar Company discovered that a check written in December for P183, 000 in payment of an account had
been recorded as P138, 000.

Included with the December 31 bank statement was an NSF check for P250, 000 that Mar Company had
received from a customer on December 20. The bank statement showed a P15, 000 service charges for
December.

What is the adjusted cash in bank on December 31?

A. 9, 239,000 C. 9, 194,000

B. 9, 214,000 D. 9, 149,000

EXPLAIN

9.3 PROBLEM SOLVING

BINJI COMPANY has various transactions. The company made deposits and withdrawn checks for
payments. The Bank Statement from MED BANK, INC. was received on July 10, 2020. Assuming there are
no reconciling items in May, BINJI has the presented the following information: Bank Statement

MED BANK, INC. Account no. 0228-2020

MARULAS BRANCH Account name: BINJI COMPANY

REQUIREMENTS:

1.) Find the transactions and amounts recorded in the book but were not recorded in the

bank (bank reconciling items).

2. Find the transactions and amounts recorded in the bank but were not recorded in the

book (book reconciling items).

3. Prepare a bank reconciliation using adjusted balance format, book to bank balance,

and bank to book balance.

REQUIRMENT 1

6/10/2020 REF: CHCK NO. 1004 10,000

6/30/2020 REF: DEPO-8 50,000 6/19/2020 REF: CHCK NO. 1007 5,500.00

6/30/2020 REF: DEPO-9 16,125.50 6/25/2020 REF: CHCK NO. 1009 12,000

66,125.50 6/28/2020 REF: CHCK NO. 1010 8,562.77

36,062.77

• The amount of deposit in transit is 66,125.50 (50,000 + 16,125.50). Benji company’s cash that
has been already deposited based on books, but not yet reflected on the bank.
• The number of outstanding checks is 36,062.77 (10,000 + 5,500 + 12,000 + 8,562.77)

REQUIREMENT 2

6/30/2020 SC6-1 250 6/18/2020 FT6-1 150,000

6/24/2020 NSF CHECK 5,000.00 6/30/2020 II6-1 497.3

• 250 amounts to the Bank service charge

• 5,000 Represent the no sufficient checks
• 150,000 Is the proceeds of note that is collected by the bank in favor of the company
• 497.3 pertains to the interest income

REQUIREMENT 3

Adjustment Balance Method:

BENJI COMPANY
BANK RECONCILIATION
JUNE 30,2020
Balance per book 383,467.05
ADD: Note collected by the
bank 150,000
Interest income 497.3 150,497.30
TOTAL: 533,964.35
 LESS: NSF Customer check 5,000
service charge 250 5,250
Adjusted book balance 528,714.35
Balance per bank 498,651.62
ADD: Deposit in transit 66,125.50
TOTAL: 564,777.12
LESS: Outstanding check
Check No. 1004 10,000
Check No. 1007 5,500
Check No. 1009 12,000
Check No. 1010 8,562.77 36,062.77
Adjusted bank balance 528,714.35

BOOK TO BANK METHOD:

BENJIE COMPANY
BANK RECONCILIATION
JUNE 30,2020
Balance per book 383,467.05
ADD: Note collected by the
bank 150,000
Interest income 497.3
Outstanding checks
Check No. 1004 10,000
Check No. 1007 5,500
Check No. 1009 12,000
Check No. 1010 8,562.77 36,062.77 186,560.07
TOTAL: 570,027.12
LESS: NSF Customer check 5,000
Bank service charge 250
Deposit in transit 66,125.50 71,375.5
Balance per bank 498,651.62

BANK TO BOOK METHOD:

BENJIE COMPANY
BANK RECONCILIATION
JUNE 30, 2020
Balance per bank 498,651.62
ADD: Deposit in transit 66,125.50
NSF Customer check 5,000
Bank service charge 250 71,375.50
 TOTAL: 570,027.12
LESS: Outstanding checks
Check no. 1004 10,000
Check no. 1007 5,500
Check no. 1009 12,000
Check no. 1010 8,562.77 36,062.77
Note collected by the bank 150,000
Interest income 497.3 186,560.07
Balance per book 383,467.05

ELABORATE

9.4 PROBLEM SOLVING

The following information is presented by APOL COMPANY. From the information given, prepare a bank
reconciliation

REQUIREMENTS:

1.) Find the transactions and amounts recorded in the book but were not recorded in the

bank (bank reconciling items).

2. Find the transactions and amounts recorded in the bank but were not recorded in the

book (book reconciling items).

REQUIREMENT 1

5/30/2016 Ref: DP-8 8,762.55

5/31/2016 REF: DP-9 10,125.88

18,888.42

• The amount of deposit in transit is 18,888.42 (8,762.55 + 10,125.88). The cash that APOL
COMPANY has already deposited in books but not yet reflected on the bank statement.

REQUIREMENT 2

5/21/2019 NSF6-1 13,300.00 5/18/2019 FT6-1 201,802.50

5/30/2019 SC5-1 665 5/30/2019 II5-1 660.04

• 13,300.00 represents the amount of no sufficient checks
• 665 Is the Bank service charge
• 201,802.50 represent the proceeds of note that is collected by the bank in favor of the
company.
• 660.04 represent the interest income

EVALUATE

9.5 PROBLEM SOLVING

The following information presented by APOL COMPANY. From the information given prepare a
bank reconciliation

REQUIREMENTS:

1.) Prepare a bank reconciliation using adjusted balance format, book to balance, and bank to book
balance.

ADJUSTED BALANCE METHOD

APOL COMPANY
BANK RECONCILIATION
MAY 31, 2019
Balance per book 119,297.88
ADD: Note collected by the
bank 201,802.50
Interest income 660.04 202,462.54
TOTAL: 321,760.42
LESS: NSF Customer check 13,300
Bank service charge 665 13,965
Adjusted book balance 307,795.42
Balance per bank 643,103.53
ADD: Deposit in transit 18,888.42
TOTAL: 661,991.95
LESS: outstanding check
Check No. 224
Rent Check No. 227
Check No. 229
Check no. 230 354,196.53
Adjusted bank balance 5,500
BOOK TO BANK METHOD:

APOL COMPANY
BANK RECONCILIATION
MAY 31, 2019
Balance per bank 643,103.53
ADD: Deposit in transit 18,888.42
NSF Customer check 13,300
Service charge 665 32,853.42
TOTAL: 675,956.95
LESS: Outstanding checks 354,196.53
Note collected by the bank 201,802.50
interest income 660.04 556,659.07
Balance per book 119,297.88

BANK TO BOOK METHOD:

APOL COMPANY
BANK RECONCILIATION
MAY 31, 2019
Balance per book 119,297.88
ADD: Note collected by the
bank 201,802.50
Interest income 660.04
Outstanding checks 354,196.53 556,659.07
TOTAL: 675,956.95
LESS: NSF customer check 13,300
service charge 665
Deposit in transit 18,888.42 32,853.42
Balance per bank 643,103.53

MOTIVATION

1.) What do you think is the best solution to the problem where Five Guys is struggling?

- The best solution for the problem would be hiring a cashbook consultant or any form of cashbooks.
Cashbooks are the chronological record of the receipts and payments transactions for a business. also
classified as a special journal. There are several types of cashbooks that is: automated cash application
software, deductions management software, automated bank reconciliation software, and automated
accounts payable software.
2.) Why do you think that is the best solution?

-Because automated cash application and bank reconciliation software are stated to be “for companies
with high-volume transactions. Built on a seamless integration between banks and ERP’s. Proven to
increase cash flow, eliminate manual processes, reduce DSO, and improve cash visibility. Automate
complex financial processes and transform your finance department”. For example, choosing cashbook
accounts payable software module from the several types of cashbooks can allow you to have one
standard of payments platform for all your locations, banks and currencies. It can allow companies to
pay their open invoices, while simultaneously reduce time usually required for the AP process. It is
Quick, easy and affordable.