PROOF OF CASH

TWO-DATE BANK RECONCILATION

Two-date bank reconciliation
 it literally involves two dates (beginning & ending balance)
 usually, previous month and current month

Usually omitted information in solving two-dates bank reconciliation

1. Book balance – beginning & ending
2. Bank balance – beginning & ending
3. Deposits in transit – beginning and ending
4. Outstanding checks – beginning and ending
 Computation of book
Balance per book – beg xx balance
Add: Book debits during the xx
month •Book debits – refers to cash receipts or all items
debited to the cash in bank account
Total xx
•Book credits – refers to cash disbursement or all
Less: Book credits during xx items credited to the cash in bank account
the month
Balance per book - end of xx
the month

Balance per bank – beg
Add: Bank credits during the month
Total
Less: Bank debits during the month
Balance per bank - end of the month
Computation of bank
xx balance
xx
•Bank credits – refers to all items credited to the
account of the depositor which include deposits
xx acknowledge by the bank and credit memos.
xx
•Bank debit – refers to all items debited to the
xx account of the depositor which include checks
paid bank and debit memos
 Computation of
Deposits in transit– beg xx deposits in
Add: Cash receipts deposited during the month

Total deposits to be acknowledge by the bank

xx

xx transit
Less: Deposits acknowledge by the bank during the xx
month

Deposits in transits - end of the month xx

Outstanding checks – beg xx Computation of
Add: Checks drawn by the
depositor during the month
xx
outstanding
Total checks to be paid by the bank xx checks
Less: Checks paid by the bank xx
during the month
Outstanding checks- end of the xx
month
 Illustration

Cash in Bank per ledger

Balance per January 31 P50,000

Book debits for February including the January CM for note 200,000
collected of P15,000
Book credits for February, including NSF check of P5,000 180,000
and service charge of P1,000

Bank statements for February

Bank credits for February, including CM for note collected P84,000

of P20,000 and deposit in transit of P40,000.
Bank debits for February, including NSF checks of P10,000 130,000
and January outstanding checks of P65,000
 January 31, 2022 Receipts Disbursements February 28, 2022
Balance per book 50,000 200,000 180,000 70,000
Note collected:
January 15,000 (15,000)
February 20,000 20,000
NSF checks:
January (5,000) (5,000)
February 10,000 (10,000)
Service charge:
January (1,000)   (1,000)  
Adjusted book balance 59,000 205,000 184,000 80,000

Balance per bank 84,000 170,000 130,000 124,000

Deposit in transit:
January 40,000 (40,000)
February 75,000 75,000
Outstanding checks
January (65,000) (65,000)
February     119,000 (119,000)
Adjusted bank balance 59,000 205,000 184,000 80,000