Free Bank Statement Reconciliation Form - PowerPoint by wde12324

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									                                                  Chapter


 Cash Receipts, Cash 9
Payments, and Banking
     Procedures
Section 3: Banking Procedures
       Section Objectives
      8.   Write a check, endorse checks,
           prepare a bank deposit slip, and
           maintain a checkbook balance.
      9.   Reconcile the monthly bank
           statement.
      10. Record any adjusting entries required
          from the bank reconciliation.
Reconciling the Bank Statement
Objective 9




 Reconcile the monthly
 bank statement.
                 Bank Statement
                   First Texas National Bank
The Style Shop
Dallas, TX 75268


                                               12,025.50




                                The codes at the bottom of the
                                statement identify transactions
                                that do not involve checks or
                                deposits.
                   Bank Statement
                   First Dallas National Bank
The Style Shop
                                                38-19-98867
Dallas, TX 75268




                                        The last column of the bank
                                        statement shows the account
                                        balance at the beginning of the
                                        period, after each day's
                                        transactions, and at the end of
                                        the period.
QUESTION:


      What is a canceled check?


ANSWER:


      A canceled check is a check paid by
      the bank on which it was drawn.
Usually there is a difference between the
ending bank statement balance and the
checkbook balance.

A bank reconciliation determines why the
difference exists and brings the records into
agreement.
Changes in the Checking Account
Balance
QUESTION:


      What is a credit memorandum?


ANSWER:


      A credit memorandum is a form that
      explains any addition, other than a
      deposit, to a checking account.
QUESTION:


      What is a debit memorandum?


ANSWER:


      A debit memorandum is a form that
      explains any deduction, other than a
      check, from a checking account.
QUESTION:


      What is a service charge?


ANSWER:


      A service charge is a fee charged by
      a bank to cover the costs of
      maintaining accounts and providing
      services.
QUESTION:


      What is a dishonored check?


ANSWER:


      A dishonored check is a check
      returned to the depositor unpaid
      because of insufficient funds in the
      drawer’s account. It is also called an
      NSF check.
     The Style Shop          First Texas National Bank
     2007 Trendsetter Lane
     Dallas, TX 75267
     # 38-14-98867



NSF Check—David Newhouse                           525.00




  A debit memorandum for a $525 dishonored check.
The Bank Reconciliation Process:
An Illustration
When the bank statement is received, it is
reconciled with the financial records of the
business.

Consider the bank statement received by The
Style Shop.
                   Bank Statement
                   First Dallas National Bank
The Style Shop
                                                38-19-98867
Dallas, TX 75268



                                                  12,025.50



 The ending cash balance
 according to the bank is
 $21,838.50.

                                                  21,838.50
On January 31 the Cash account, called the
book balance of cash, is $14,390.70.

The same amount appears on the check stub at
the end of January.
    Sometimes the difference between the bank
    balance and the book balance is due to errors.

   Errors made by banks         Errors made by businesses
Arithmetic errors                 Arithmetic errors


Giving credit to the wrong        Not recording a check or
depositor                         deposit

Charging a check against         Recording a check or
the wrong account                deposit for the wrong amount


    Many banks require that errors in the bank statement be
    reported within a short period of time, usually 10 days.
Other than errors, there are four reasons why the book
balance of cash may not agree with the balance on the
bank statement.

 1. Outstanding checks.
 2. Deposit in transit.
 3. Service charges and other deductions not recorded in
    the business records.
 4. Deposits, such as the collection of promissory notes,
    not recorded in the business records.
QUESTION:


      What are outstanding checks?


ANSWER:


      Outstanding checks are checks that
      have been recorded in the cash
      payments journal but have not yet
      been paid by the bank.
QUESTION:


      What is a deposit in transit?


ANSWER:


      A deposit in transit is a deposit that
      is recorded in the cash receipts
      journal but that reaches the bank
      too late to be shown on the monthly
      bank statement.
QUESTION:


      What is a bank reconciliation statement?


ANSWER:


      A bank reconciliation statement is a
      statement that accounts for all
      differences between the balance on
      the bank statement and the book
      balance of cash.
          Format of a bank reconciliation statement


         First Section                         Second Section

         Bank statement balance   =             Book balance

     +   deposits in transit              +     deposits not recorded

    –    outstanding checks               –     deductions

+ or –   bank errors                  + or –    errors in books

         Adjusted bank balance    =             Adjusted book balance
Steps to prepare the bank reconciliation statement:

First Section
1.   Enter the balance on the bank statement.
2.   Compare the deposits in the checkbook with the deposits
     on the bank statement.
3.   List the outstanding checks.
4.   List any bank errors.
5.   Compute the adjusted bank balance.
                             The Style Shop
                          The Trend Center
                       Bank Reconciliation Statement
                        January 31, 20--

         Bank statement balance                        21,838.50




Step 1: Enter the balance on the bank statement, $21,838.50
                                    The Style Shop
                                 The Trend Center
                              Bank Reconciliation Statement
                               January 31, 20--

              Bank statement balance                             21,838.50
              Additions:
               Deposit of January 31 in transit       5,940.00




Step 2: Compare the deposits in the checkbook with the deposits on
the bank statement.
On January 31 receipts of $5,940.00 were placed in the bank's night
deposit box.

The bank recorded the deposit on February 1. The
deposit will appear on the February bank statement.
                                 The Style Shop
                              The Trend Center
                           Bank Reconciliation Statement
                            January 31, 20--

           Bank statement balance                             21,838.50
           Additions:
            Deposit of January 31 in transit       5,940.00



           Deductions for outstanding checks:
              Check 124 of January 31                565.00
              Check 125 of January 31              4,950.00
              Check 126 of January 31              3,200.00
              Check 127 of January 31                175.00
              Check 128 of January 31                172.80
              Check 129 of January 31              6,300.00
              Check 130 of January 31                175.00
                    Total outstanding checks                  15,537.80


Step 3: List the outstanding checks. The Style Shop has seven
outstanding checks totaling $15,537.80.
                              The Style Shop
                           The Trend Center
                        Bank Reconciliation Statement
                         January 31, 20--

         Bank statement balance                             21,838.50
         Additions:
          Deposit of January 31 in transit       5,940.00
          Check incorrectly charged to account   1,600.00    7,540.00
                                                            29,378.50
        Deductions for outstanding checks:
           Check 124 of January 31                 565.00
           Check 125 of January 31               4,950.00
           Check 126 of January 31               3,200.00
           Check 127 of January 31                 175.00
           Check 128 of January 31                 172.80
           4: List of January 31
      Step Check 129any bank errors.             6,300.00
           Check 130 of January 31                 175.00
                 Total outstanding checks                   15,537.80


A $1,600 check was incorrectly deducted from The
Style Shop’s account.
                       The Style Shop
                    The Trend Center
                 Bank Reconciliation Statement
                  January 31, 20--

  Bank statement balance                             21,838.50
  Additions:
   Deposit of January 31 in transit       5,940.00
   Check incorrectly charged to account   1,600.00    7,540.00
                                                     29,378.50
  Deductions for outstanding checks:
     Check 124 of January 31                565.00
     Check 125 of January 31              4,950.00
     Check 126 of January 31              3,200.00
     Check 127 of January 31                175.00
     Check 128 of January 31                172.80
     Check 129 of January 31              6,300.00
     Check 130 of January 31                175.00
            Total outstanding checks                 15,537.80
  Adjusted bank balance                               13,840.70



Step 5: Compute the adjusted bank balance.
Steps to prepare the bank reconciliation statement:

Second Section
1.   Enter the balance in books from the Cash account.

2.   Record any deposits made by the bank that have not been
     recorded in the accounting records.

3.   Record deductions made by the bank.

4.   Record any errors in the accounting records that were discovered
     during the reconciliation process.

5.   Compute the adjusted book balance.
                                  The Style Shop
                               The Trend Center
                            Bank Reconciliation Statement
                             January 31, 20--

            Bank statement balance                             21,838.50
            Additions:
             Deposit of January 31 in transit       5,940.00
             Check incorrectly charged to account   1,600.00    7,540.00
                                                               29,378.50
            Deductions for outstanding checks:
               Check 124 of January 31           565.00
               Check 125 of January 31         4,950.00
               Check 126 of January 31         3,200.00
               Check 127 of January 31           175.00
Step 1:         the 128 of January 31
          EnterCheckbalance in books from the Cash account,
                                                 172.80                    $14,390.70.
               Check 129 of January 31         6,300.00
               Check 130 of January 31           175.00
                      Total outstanding checks          15,537.80
            Adjusted bank balance                        13,840.70

             Book balance                                      14,390.70
                                       The Style Shop
                                    The Trend Center
                                 Bank Reconciliation Statement
                                  January 31, 20--

                 Bank statement balance                               21,838.50
                 Additions:
                  Deposit of January 31 in transit         5,940.00
                  Check incorrectly charged to account     1,600.00    7,540.00
                                                                      29,378.50
              Deductions for outstanding checks:
                 Check 124 of January 31                     565.00
Step 2: Record any deposits made by
                 Check 125 of January 31                 the bank that have
                                                           4,950.00               not been
recorded in the accounting records.
                 Check 126 of January 31                   3,200.00
                 Check 127 of January 31                     175.00
                 Check 128 have any.
The Style Shop did notof January 31                          172.80
                 Check 129 of January 31                   6,300.00
                 Check 130 of January 31                     175.00
                        Total outstanding checks                    15,537.80
              Adjusted bank balance                                  13,840.70

                  Book balance                                        14,390.70
                                       The Style Shop
                                    The Trend Center
                                 Bank Reconciliation Statement
                                  January 31, 20--

                  Bank statement balance                             21,838.50
                  Additions:
                   Deposit of January 31 in transit       5,940.00
                   Check incorrectly charged to account   1,600.00    7,540.00
                                                                     29,378.50
             Deductions for outstanding checks:
Step 3: Record deductions made by
                Check 124 of January 31              the bank. There are two items:
                                                         565.00
                Check 125 of January 31                   4,950.00
                Check $525
 The NSF check for126 of January 31                      3,200.00
                Check 127 of January 31                     175.00
                Check 128 of January $25
 The bank service charge for31                             172.80
                Check 129 of January 31                   6,300.00
                Check 130 of January 31                     175.00
                       Total outstanding checks                      15,537.80
             Adjusted bank balance                                    13,840.70

                  Book balance                                       14,390.70
                  Deductions:
                    NSF Check                              525.00
                    Bank service charge                     25.00       550.00
                                      The Style Shop
                                   The Trend Center
                                Bank Reconciliation Statement
                                 January 31, 20--

                 Bank statement balance                             21,838.50
                 Additions:
                  Deposit of January 31 in transit       5,940.00
                  Check incorrectly charged to account   1,600.00    7,540.00
                                                                    29,378.50
             Deductions for outstanding checks:
                Check 124 of January 31           565.00
Step 4: Record any errors in the accounting records
                Check 125 of January 31         4,950.00                        that were
discovered during the reconciliation process.
                Check 126 of January 31         3,200.00
                Check 127 of January 31           175.00
                Check 128 have any
The Style Shop did notof January 31 errors in January.
                                                  172.80
                Check 129 of January 31         6,300.00
                Check 130 of January 31           175.00
                       Total outstanding checks          15,537.80
             Adjusted bank balance                        13,840.70

                 Book balance                                       14,390.70
                 Deductions:
                   NSF Check                              525.00
                   Bank service charge                     25.00      550.00
                             The Style Shop
                          The Trend Center
                       Bank Reconciliation Statement
                        January 31, 20--

        Bank statement balance                              21,838.50
        Additions:
         Deposit of January 31 in transit        5,940.00
         Check incorrectly charged to account    1,600.00    7,540.00
                                                            29,378.50
        Deductions for outstanding checks:
           Check 124 of January 31                 565.00
           Check 125 of January 31               4,950.00
           Check 126 of January 31               3,200.00

Step       Check 127 of
       5: ComputeJanuary 31
                          the adjusted
           Check 128 of January 31
                                                   175.00
                                                book balance.
                                                   172.80
           Check 129 of January 31               6,300.00
           Check 130 of January 31                 175.00
                  Total outstanding checks                15,537.80
        Adjusted bank balance                              13,840.70

        Book balance                                        14,390.70
        Deductions:
          NSF Check                                525.00
          Bank service charge                       25.00      550.00
        Adjusted book balance                               13,840.70
                                   The Style Shop
                                The Trend Center
                             Bank Reconciliation Statement
                              January 31, 20--

              Bank statement balance                             21,838.50
              Additions:
               Deposit of January 31 in transit       5,940.00
               Check incorrectly charged to account   1,600.00    7,540.00
                                                                 29,378.50
             Deductions for outstanding checks:
                Check 124 of January 31           565.00
                Check 125 of January 31         4,950.00
                Check 126 of January 31         3,200.00
                  adjusted bank
Notice that theCheck 127 of January 31 balance and the adjusted
                                                  175.00                     book
balance agree.Check 128 of January 31             172.80
                Check 129 of January 31         6,300.00
                Check 130 of January 31           175.00
                       Total outstanding checks          15,537.80
             Adjusted bank balance                        13,840.70

              Book balance                                       14,390.70
              Deductions:
                NSF Check                              525.00
                Bank service charge                     25.00       550.00
              Adjusted book balance                              13,840.70
       Thank You
             for using

College Accounting, 11’th Edition



      Price • Haddock • Brock

								
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