FA1 - Bank Reconciliation
-
Upload
kei-paceno -
Category
Documents
-
view
57 -
download
5
description
Transcript of FA1 - Bank Reconciliation
![Page 1: FA1 - Bank Reconciliation](https://reader036.fdocuments.in/reader036/viewer/2022082408/55725c23497959da6be8a786/html5/thumbnails/1.jpg)
BANKRECONCILIATION
![Page 2: FA1 - Bank Reconciliation](https://reader036.fdocuments.in/reader036/viewer/2022082408/55725c23497959da6be8a786/html5/thumbnails/2.jpg)
Bank Deposits
1. Demand deposit – CA or commercial deposit, NONinterest-bearingdeposits – covered by deposit slipswithdrawal – drawing checks
2. Saving deposit – deposits and withdrawals can be made anytime with passbook- interest-bearing
![Page 3: FA1 - Bank Reconciliation](https://reader036.fdocuments.in/reader036/viewer/2022082408/55725c23497959da6be8a786/html5/thumbnails/3.jpg)
Bank Deposits (cont.)
3. Time deposit – evidenced by formal agreement embodied in certificate of deposit- interest-bearing- may be preterminated or withdrawn on demand or after a certain period of time agreed upon
![Page 4: FA1 - Bank Reconciliation](https://reader036.fdocuments.in/reader036/viewer/2022082408/55725c23497959da6be8a786/html5/thumbnails/4.jpg)
Bank Reconciliation
• Statement w/c brings into agreement the cash balance per book and the cash balance per bank
• necessary only for a demand deposit or checking account
![Page 5: FA1 - Bank Reconciliation](https://reader036.fdocuments.in/reader036/viewer/2022082408/55725c23497959da6be8a786/html5/thumbnails/5.jpg)
Reconciling items
Book reconciling items
1. Credit memos2. Debit memos3. Errors
![Page 6: FA1 - Bank Reconciliation](https://reader036.fdocuments.in/reader036/viewer/2022082408/55725c23497959da6be8a786/html5/thumbnails/6.jpg)
Reconciling items (cont.)
Bank reconciling items
1. Deposits in transit2. Outstanding checks3. Errors
![Page 7: FA1 - Bank Reconciliation](https://reader036.fdocuments.in/reader036/viewer/2022082408/55725c23497959da6be8a786/html5/thumbnails/7.jpg)
Credit memos
• Items not representing deposits credited by the bank to the account of the depositor but not yet recorded by the depositor as cash receipts
• Increase bank balance• Examples: note receivable collected by bank,
proceeds of bank loan, matured time deposit
![Page 8: FA1 - Bank Reconciliation](https://reader036.fdocuments.in/reader036/viewer/2022082408/55725c23497959da6be8a786/html5/thumbnails/8.jpg)
Debit memos
• Items not representing checks paid by bank w/c are charged or debited by the bank to the account of the depositor but not yet recorded by the depositor as cash disbursements
• Decrease bank balance• Examples: NSF checks, technically defective
checks, bank service charges, reduction of loan
![Page 9: FA1 - Bank Reconciliation](https://reader036.fdocuments.in/reader036/viewer/2022082408/55725c23497959da6be8a786/html5/thumbnails/9.jpg)
Deposits in transit
• Collections already recorded by the depositor as cash receipts but not yet reflected on the bank statement
• Include:a. collections already forwarded to the bank for deposit but too late to appear in BSb. undeposited collections (cash on hand)
![Page 10: FA1 - Bank Reconciliation](https://reader036.fdocuments.in/reader036/viewer/2022082408/55725c23497959da6be8a786/html5/thumbnails/10.jpg)
Outstanding checks
• Checks already recorded by the depositor as cash disbursements but not yet reflected on the bank statement
• Include:a. checks drawn & delivered to payee but not yet presented for paymentb. certified checks – should be deducted from the total OC (if included therein)
![Page 11: FA1 - Bank Reconciliation](https://reader036.fdocuments.in/reader036/viewer/2022082408/55725c23497959da6be8a786/html5/thumbnails/11.jpg)
Forms of bank reconciliation
1. Adjusted balance method – book & bank balance are brought to correct cash balance that must appear on the balance sheet
2. Book to bank method – book balance is adjusted to equal the bank balance
3. Bank to book method – bank balance is adjusted to equal the book balance
![Page 12: FA1 - Bank Reconciliation](https://reader036.fdocuments.in/reader036/viewer/2022082408/55725c23497959da6be8a786/html5/thumbnails/12.jpg)
Adjusted balance method
Book balance xxAdd: Credit memos xxLess: Debit memos (xx)Adjusted book balance xx
Bank balance xxAdd: Deposits in transit xxLess: Outstanding checks (xx)Adjusted bank balance xx
![Page 13: FA1 - Bank Reconciliation](https://reader036.fdocuments.in/reader036/viewer/2022082408/55725c23497959da6be8a786/html5/thumbnails/13.jpg)
Book to bank method
Book balance xxAdd: Credit memos xx
Outstanding checks xx xxTotal xxLess: Debit memos xx
Deposits in transit xx (xx)Bank balance xx
![Page 14: FA1 - Bank Reconciliation](https://reader036.fdocuments.in/reader036/viewer/2022082408/55725c23497959da6be8a786/html5/thumbnails/14.jpg)
Bank to book method
Bank balance xxAdd: Debit memos xx
Deposits in transit xx xxTotal xxLess: Credit memos xx
Outstanding checks xx (xx)Book balance xx