Reconciling the Bank statement Explains the difference between cash reported on bank statement and cash balance in depositor accounting records Provides information for reconciling journal entries Irwin/McGraz-Hill TThe McGraw-Hill Companies, Inc, 1999
?The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill Reconciling the Bank Statement Explains the difference between cash reported on bank statement and cash balance in depositor抯 accounting records. Provides information for reconciling journal entries
Reconciling the Bank statement Balance per Bank Balance per Depositor Deposits in Transit Deposits by Bank (credit memos) Outstanding Checks Service Charge NSF Checks ?Bank Errors ?Book Errors Adjusted Balance Adjusted Balance Irwin/McGraz-Hill TThe McGraw-Hill Companies, Inc, 1999
?The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill Reconciling the Bank Statement Balance per Bank + Deposits in Transit - Outstanding Checks ?Bank Errors = Adjusted Balance Balance per Depositor + Deposits by Bank (credit memos) - Service Charge - NSF Checks ?Book Errors = Adjusted Balance
Reconciling the Bank statement Al Balance per Depositor reconciling Deposits by Bank items on the (credit memos) book side Service Charge require an NSF Checks adjusting ?Book Errors entry to the cash account Adjusted Balance Irwin/McGraz-Hill TThe McGraw-Hill Companies, Inc, 1999
?The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill Reconciling the Bank Statement All reconciling items on the book side require an adjusting entry to the cash account. Balance per Depositor + Deposits by Bank (credit memos) - Service Charge - NSF Checks ?Book Errors = Adjusted Balance
Reconciling the Bank statement Example Prepare a July 31 bank reconciliation statement and the resulting journal entries for the Simmons Company. The July 31 bank statement indicated a cash balance of $9, 610, while the cash ledger account on that date shows a balance of $7, 430 Additional information necessary for the reconciliation is shown on the next page Irwin/McGraz-Hill TThe McGraw-Hill Companies, Inc, 1999
?The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill Reconciling the Bank Statement Example Prepare a July 31 bank reconciliation statement and the resulting journal entries for the Simmons Company. The July 31 bank statement indicated a cash balance of $9,610, while the cash ledger account on that date shows a balance of $7,430. Additional information necessary for the reconciliation is shown on the next page