Bank reconciliation

• Economie

Chapter 11

Section 2:Reconciling the Bank Statement, Pages 287-305

Objectives

Describe bank reconciliation and the form of reconciliation

Analyze the  bank reconciling for with the business.

Discuss on journalizing the bank service charges.

What is the 3rd step of preparing bank reconciliation?

1. Enter the ending balance shown on the bank statement
2. Subtract the total outstanding checks from the amount calculated
3. Comparing the deposits listed on the bank statement to deposits in the checkbook
4. Arrange the cancelled checks

Bank Reconciliation

Upon receipt, the bank statement is compared to the checkbook. The
process of determining any differences between the bank statement and  the checkbook is called reconciling the bank statement.It is also known as

a bank reconciliation.

Steps to reconcile a bank statement

1.Arrange canceled checks in numerical order.Compare the canceled checks with those listed on the statement and with the stubs.

2.Enter the ending balance shown in the bank statement.

3.Compare deposits listed on the bank deposits listed in the checkbook.Enter the total of any outstanding  deposits on the reconciliation form.Add this total to the bank statement balance and enter the result on the form.

4.Subtract the total of the outstanding checks from the amount.

5.Compare the adjusted bank balance to the checkbook balance.

Which is the 4th step in the bank reconciliation form?

Subtract outstanding check from the amount calculated in step 3.The result is adjusted Balance.

Bank reconciliation

What do you with the balance on bank statement?

1. Deposit in transit are not included
2. Subtract deposit in transit
3. Deposits in transit are excluded
4. Add Deposits in transit

Write a procedure for locating and correcting the errors.

Steps of correcting errors

(1) Check the addition/subtraction on the check stubs and bank

reconciliation. 

(2) Look for outstanding checks or deposits. 

(3) Make corrections.

(4) Reconcile again.

Journalize the transaction

On November 12 Zach received the bank statement . A bank service charge of $6 appeared on the statement.

Write the journal entry for the above transaction.

What is the source document for the journal entry to record bank service charges?

What are the important points of the lesson?