Accounting Test No BR1: Bank Reconciliation

Question No BR1:

In early August 06, Company A received a bank statement which showed a balance of $55,262 as at 31 th July’06. However, its own record showed a balance of $55,597 on the same date.

The following differences are identified:

(i)      Deposits amounted to $1,300 was not in the bank statement;

(ii)     Two checks were sent to suppliers, but yet to be accounted for by the bank. The checks details were as follows:

· Check no:6661 dated July 20 $380

· Check no:6662 dated July 27 $670

(iii)  The bank imposed a service charge of $55

(iv)   A check no 6666 issued on July 24 for water bill amounting to $3,350 was wrongly entered in the cash payment journal as $3,530. The amount was correctly shown as $3,350 in the bank statement.

(v)  A check amounting to $210 was received from customer ABC on July 15 and deposited a day after. However, due to insufficient fund in Mr.ABC’s account, the bank informed the Company A that the dishonored check had been debited to Company A.

Show the Bank Reconciliation Statement for Company A.

Question No 2:

Company XYZ received a bank statement for the month of August 2006. The bank statement showed the following information:

Balance, August 1, 2006 $68,326

Deposits 45,300

Checks processed (36,222)

Service charges (50)

Monthly deposit into saving account directly

Deducted by bank from account (680)

Balance, August 31 st , 2006 $76,674

Company XYZ’s general ledger account had a balance of $78,304 at the end of August 2006.

(i) Deposits outstanding amounting to $8,200;

(ii) all checks written by the company were processed by the bank except for those totaling $8,420;

(iii) A $2,000 check to a supplier correctly recorded by the bank but was incorrectly recorded by the company as $200 credit to cash.

Required:

1.   Prepare a bank reconciliation statement for the month of August’06

2.   Prepare the necessary journal entries at the end of August to adjust the general ledger cash account.

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