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FABM2 Q2 MOD2 Bank-Reconciliation-Statement Nak
FABM2 Q2 MOD2 Bank-Reconciliation-Statement Nak
FABM2 Q2 MOD2 Bank-Reconciliation-Statement Nak
Accounting, Business
and Management 2
Quarter 2 – Module 2:
Bank Reconciliation Statement
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Every effort has been exerted to locate and seek permission to use these materials from their
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over them.
Team Leaders:
School Head : Reynaldo B. Visda
LRMDS Coordinator : Melbourne L. Salonga
This learning resource hopes to engage the learners into guided and independent
learning activities at their own pace and time. Furthermore, this also aims to help
learners acquire the needed 21st century skills while taking into consideration their
needs and circumstances.
In addition to the material in the main text, you will also see this box in the body of
the module:
As a facilitator you are expected to orient the learners on how to use this module.
You also need to keep track of the learners' progress while allowing them to manage
their own learning. Furthermore, you are expected to encourage and assist the
learners as they do the tasks included in the module.
1
For the learner:
The hand is one of the most symbolized part of the human body. It is often used to
depict skill, action and purpose. Through our hands we may learn, create and
accomplish. Hence, the hand in this learning resource signifies that you as a learner
is capable and empowered to successfully achieve the relevant competencies and
skills at your own pace and time. Your academic success lies in your own hands!
This module was designed to provide you with fun and meaningful opportunities for
guided and independent learning at your own pace and time. You will be enabled to
process the contents of the learning resource while being an active learner.
What I Need to Know This will give you an idea of the skills or
competencies you are expected to learn in the
module.
2
What I Can Do This section provides an activity which will
help you transfer your new knowledge or skill
into real life situations or concerns.
1. Use the module with care. Do not put unnecessary mark/s on any part of the
module. Use a separate sheet of paper in answering the exercises.
2. Don’t forget to answer What I Know before moving on to the other activities
included in the module.
3. Read the instruction carefully before doing each task.
4. Observe honesty and integrity in doing the tasks and checking your answers.
5. Finish the task at hand before proceeding to the next.
6. Return this module to your teacher/facilitator once you are through with it.
If you encounter any difficulty in answering the tasks in this module, do not
hesitate to consult your teacher or facilitator. Always bear in mind that you are
not alone.
We hope that through this material, you will experience meaningful learning and
gain deep understanding of the relevant competencies. You can do it!
3
What I Need to Know
From the last module, we have understood the bank reconciling items. These items
are important in preparing for bank reconciliation statement.
What I Know
3. The bank erroneously debited P10,000 check on out account. what is the entry
to correct the books?
a. DR: accounts receivable CR: cash in bank
b. DR: miscellaneous expense CR: cash in bank
c. DR: accounts receivable CR: miscellaneous expense
d. No entry
4
Lesson
Bank Reconciliation
1 Statement
NON-CURRENT ASSETS
PROPERTY, PLANT AND EQUIPMENT
LAND ₱ 500,000 BANK
BUILDING ₱ 250,000
LESS: ACCUMULATED DEPRECIATION-BLDG 15,000 235,000 RECONCILIATION
EQUIPMENT 70,000 STATEMENT
LESS: ACCUMULATED DEPRECIATION-EQPT 14,000 56,000
FURNITURE AND FIXTURES 10,000 801,000
TOTAL ASSETS ₱ 1,114,500
CURRENT LIABILITIES
ACCOUNTS PAYABLE ₱ 50,000
ACCRUED EXPENSE 25,000
TOTAL CURRENT LIABILITIES ₱ 75,000
NON-CURRENT LIABILITIES
LOANS PAYABLE (6 YEARS) 30,000
MORTGAGE PAYABLE 800,000
TOTAL NON-CURRENT LIABILITIES 830,000
₱ 905,000
OWNER'S EQUITY
MAGALING, CAPITAL 6/30/2020 209,500
TOTAL LIABILITIES AND OWNERS EQUITY ₱ 1,114,500
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Here is the proforma of the bank reconciliation statement.
(Company Name)
Bank Reconciliation Statement
As of _______________
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What’s In
Do you still remember the bank reconciling items? Let us recall them by filling the
blanks below.
1. O T S C S
2. E T N T
3. B E R
1. B C
2. N D
3. O K R R
How are these items important to bank reconciliation? Answer the following
questions.
1. What is a bank reconciliation?
___________________________________________________________________________
___________________________________________________________________________
2. Who should prepare bank recon and how often should it be done?
___________________________________________________________________________
___________________________________________________________________________
7
What’s New
Let us break down the steps how to prepare a bank reconciliation statement. In order
to check both bank and book records, you need to prepare the bank statement and
the book transactions for the month.
STEP 1: Get the ending cash balances for both bank and cash ledger.
Illustrative Problem:
The following are the transactions of ABM Consultancy Services. The balance in
the ledger is P39,500 while the bank has P144,600.
8
Below is the July Bank Statement of ABM Consultancy Services:
Matapat Bank
Limay, Bataan Branch
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STEP 2: Compare the deposits credited and checks paid by the bank against the
deposits and checks recorded in the book. In the Illustrative example, we have put
check marks on the deposits and checks that are present in both bank and book
records.
Deposits Checks
P 53,900
10
STEP 3: Compute for the deposit in transit and outstanding checks.
Deposit in Transit
Beginning deposit in transit is the deposit which is found in
the bank statement but are no longer part of the present
month’s deposit. Look for the deposit side (credit side) of the
bank statement, we mark x because we cannot find it in the
transaction of July. (Image: Deposits from Matapat Bank
Statement)
11
From the deposits made in the book, it can be clearly seen that deposits which are
not yet reflected in the bank is P28,400 the same as the computed amount.
Deposits
July 4 P 9,000
July 18 30,000
July 24 23,000**
= P 28,400
July 28 5,400**
P 67,400
Outstanding Checks
Beginning outstanding checks are checks which
were in the bank statement but are no longer part
of the present month’s issued checks. Look for the
withdrawal side (debit side) of the bank statement,
we mark x because we cannot find it in the
transaction of July. (Image: Checks from Matapat
Bank Statement)
From the checks issued per the book, it can be clearly seen that checks which are
not yet reflected in the bank is P18,000 the same as the computed amount.
Checks
Check No. 00101 P 6,000
00102 3,000**
00103 9,900 =P 18,000
00104 15,000**
00105 20,000
P 53,900
12
STEP 4: Check for bank errors as these errors will be added or subtracted to the
bank balance or book balance, depending on their effect on the balances. In this
example, it is the erroneous withdrawal of the bank to our account amounting to
P11,000, so we will add it back to the bank balance.
13
STEP 5: Journalize the book reconciling items to update the book.
General Journal
Note: To see the effects on the General Ledger Balance after the adjustments:
Account Cash in bank 101
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What is It
2. ___________________________________________________________________________
___________________________________________________________________________
3. ___________________________________________________________________________
___________________________________________________________________________
4. ___________________________________________________________________________
___________________________________________________________________________
5. ___________________________________________________________________________
___________________________________________________________________________
Things to remember:
Who should prepare bank reconciliation?
Bigger companies usually assign persons who handles bank reconciliation and that
is the accounting department. But in a practical sense, every business who has bank
account should do bank reconciliation. It should be done on a monthly basis.
A business who do not regularly do bank reconciliation, is more prone to fraud, theft,
and bank errors. In the long run, it affects the operations, credibility, and goodwill.
There are three types of internal control, detective, preventative and corrective
(University of Florida - Finance and Accounting 2020). Bank reconciliation is a
detective internal control where in it finds errors or problems after the transaction
has occurred and offers fact-after-fact detection of irregularities.
15
What’s More
Activity1: Copy and compare book and bank statements. Put a CHECK (/) on the
deposits and checks found in both bank and book records of ABM CPA Review
Center.
Deposits Checks
Mar 1 12,000 Check No. 00401 9,000
5 10,000 00402 17,000
13 5,000 00403 13,000
20 31,000 00404 8,000
28 20,000 00405 5,000
78,000 52,000
Philippine Bank
Limay, Bataan Branch
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Bank statement information:
1. Bank loan is credited by the bank, P100,000.
2. NSF check was returned, P5,000.
3. The two debit memos are both bank service charges.
4. Check 11021 is a bank error.
Activity 2: From the transactions of ABM CPA Review Center, compute the following
items in good form.
17
Activity 3: Let us prepare bank reconciliation statement for ABM CPA Review
Center.
____________________________
Bank Reconciliation Statement
___________________________
18
Activity 4: Journalize the book reconciling items for ABM CPA Review Center.
General Journal
19
What I Have Learned
20
What I Can Do
Always remember the lesson about bank reconciling items. The details of the book
and the bank should arrive at a similar cash balance to say we have achieved correct
cash in bank balance. Let us simplify the idea of bank reconciliation. To put together
lessons about bank reconciliation, analyze the activity below and compute for the
correct cash balance.
BANK BOOK
P P
P P
21
Assessment
Deposits Checks
Mar 1 120,000 Check No. 00601 90,000
5 170,000 00602 117,000
13 15,000 00603 213,000
20 131,000 00604 58,000
28 220,000 00605 95,000
656,000 573,000
Mayaman Bank
Limay, Bataan Branch
Required:
1. Show computations for deposit in transit and outstanding checks.
2. Prepare bank reconciliation statement for ABM Drive-in Cinema.
3. Journalize book reconciling items.
22
Additional Activities
Activity 1. Given the following items in preparing the bank reconciliation, match the
procedure necessary for each item. (Ong and Gomendoza 2017)
Column A Column B
____1. NSF checks returned by the
bank.
a. Add to cash balance per book
____2. Check collections deposited on b. Deduct from cash balance per
the last day of the month. book
c. Add to cash balance per bank
____3. Notes and interest collected by d. Deduct from cash balance per
the bank for the account holder. bank
e. Is not an item for bank
____4. Promissory note received from a reconciliation
customer in settlement of an account.
Activity 2: Bank statement of Super Mark It for the month of January showed a
balance per bank of P91,000. Cash balance per general ledger is P88,700 at the end
of the month.
Additional information:
23
What I Know:
Student’s answer may vary.
What’s in
1. Outstanding checks
2. Deposit in transit
3. Bank error
4. Bank credit
5. Bank debit
6. Book error
Essay:Student’s answer may vary.
What is it:
What’s More
Act1: Deposits with check mark (/): Mar 1, 5, 13, 20
Check # with check mark (/): 402, 405
Act2: DIT : P 20,000
OC: P30,000
Activity 3:
Correct cash balance for both book and bank after
reconciliation: P 193,800
Activity 4:
Mar 31. Cash in bank P100,000
Loans payable P100,000
To record proceeds of the loan
Miscellaneous expense P1200
Cash in bank P1200
To record bank service charges
Accounts receivable P5000
Cash in bank P5000
To record NSF checks
What I have Learned:
Student’s answer may vary.
What can I Do:
Correct cash balance: P21,251
Answer Key
Assessment:
Activity #1:
Deposit in transit: P 351,000
Outstanding checks: P 270,000
Activity #2:
Correct cash balance for both bank and book: P1,352,000
Activity #3:
Mar 31. Cash in bank P1,000,000
Loans payable P1,000,000
To record proceeds of the loan
Miscellaneous expense P2000
Cash in bank P2000
To record bank service charges
Accounts receivable P65000
Cash in bank P65000
To record NSF checks
Additional activities:
Activity #1:
1. B
2. C
3. A
4. E
5. B
Activity #2:
Correct cash balance: P88,600
References
Ong, Flocer Lao, and Janelle Gomendoza. 2017. Fundamentals of Accounting,
Business and Management 2 for Senior High School. C & E Publishing, Inc.
n.d. Oxford Languages. Accessed September 20, 2020.
https://www.google.com/search?q=reconcile&rlz=1C1SQJL_enPH910PH910
&oq=recon&aqs=chrome.1.69i57j0l7.2788j0j15&sourceid=chrome&ie=UTF-
8.
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