Answers To Accounting Question BR No 1 On Bank Reconciliation

October 12th, 2006 Comments off
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Answer to Question No BR1:

Company A

Bank Reconciliation as at 31 st July 2006 $

Balance as per bank statement at 31 st July 2006 55,262

Add: Deposits in transit / Uncredited deposits         1,300

                                                                       56,562

Deduct:

Unpresented cheques

Check No

6661 dated July 20th                                               $380

6662 dated July 27th                                              1,050

Adjusted Bank balance at 31 st July 2006                55,512

Balance as per Bank account at 31 st July 2006         55,597

Add: Check no 6666 (Overstated amount)                    180

                                                                           55,777

Deduct:

Bank service charge                                         $55

Dishonored check                                           $210

                                                                              265

Adjusted Cash balance at 31 st July 2006                55,512

 

Answer to Question No 2:

Part 1 : Preparation of Bank Reconciliation Statement:

 

Company XYZ

Bank Statement As At 31 st August 2006 $

Step 1: Bank Balance to Corrected Balance

Balance per Bank Statement                $74,674

Add: Deposits Outstanding                     8,200

Deduct: Checks Outstanding                 (8,420)

                                                      $74,454

Step 2: Book Balance to Corrected Balance

Balance per Book                                              $78,304

Service charges                                                      (50)

Automatic monthly transfer                                 (2,000)

Error in recording cash disbursement ($2,000-200) (1,800)

Corrected Cash Balance                                    $74,454

 

Part B: To record credits to cash revealed by the bank reconciliation.

Miscellaneous charges ( bank service charges) $50

Cash-savings account $2,000

Accounts payable $1,800

Cash $3,850

 

[PS: Each adjustment affecting the book balance required journal entries

None of the adjustments to the bank balance require entries. ]

 

 REFER TO CONTENT PAGE FOR ALL ARTICLES ON BANK RECONCILIATION STATEMENT

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Financial Accounting

 
 

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