ABC Co. is preparing its October 31, 2020 bank reconciliation. The following information was determined. a. The cash balance per books is P560,000 while cash balance per bank statement is P640,000. b. Credit memo P40,000 c. Debit memo P30,000 d. Deposit in transit P150,000 e. Outstanding checks P50,000 f. The disbursement per books are overstated by P90,000. g. The bank debits are understated by P80,000. Requirements. 1. Prepare bank reconciliation. Bank Reconciliation Statement Balance per books, end Add: Credit memos Less: Debit memos (NSF) Add/Less: Book errors Bal. per bank statement, end Add: Deposits in transit (DIT) Less: Outstanding checks (OC) Add/Less: Bank errors Adjusted balance Adjusted balance 2. List down the nature of error its effect on ending balance of cash and the corrections made. Nature of Error Effect on ending balance of cash Correction (Book or Bank) (Amount credited/ debited) (Overstated or Understated) e.g. Cr. P10,000 1. 2.

ABC Co. is preparing its October 31, 2020 bank reconciliation. The following information was determined. a. The cash balance per books is P560,000 while cash balance per bank statement is P640,000. b. Credit memo P40,000 c. Debit memo P30,000 d. Deposit in transit P150,000 e. Outstanding checks P50,000 f. The disbursement per books are overstated by P90,000. g. The bank debits are understated by P80,000. Requirements. 1. Prepare bank reconciliation. Bank Reconciliation Statement Balance per books, end Add: Credit memos Less: Debit memos (NSF) Add/Less: Book errors Bal. per bank statement, end Add: Deposits in transit (DIT) Less: Outstanding checks (OC) Add/Less: Bank errors Adjusted balance Adjusted balance 2. List down the nature of error its effect on ending balance of cash and the corrections made. Nature of Error Effect on ending balance of cash Correction (Book or Bank) (Amount credited/ debited) (Overstated or Understated) e.g. Cr. P10,000 1. 2.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

ABC Co. is preparing its October 31, 2020 bank reconciliation. The following information was
determined.
a. The cash balance per books is P560,000 while cash balance per bank statement is
P640,000.
b. Credit memo P40,000
c. Debit memo P30,000
d. Deposit in transit P150,000
e. Outstanding checks P50,000
The disbursement per books are overstated by P90,000.
g. The bank debits are understated by P80,000.
f.
Requirements.
1. Prepare bank reconciliation.
Bank Reconciliation Statement
Balance per books, end
Add: Credit memos
Bal. per bank statement, end
Add: Deposits in transit (DIT)
Less: Outstanding checks (OC)
Add/Less: Bank errors
Less: Debit memos (NSF)
Add/Less: Book errors
Adjusted balance
Adjusted balance
2. List down the nature of error its effect on ending balance of cash and the corrections made.
Nature of Error
Effect on ending balance
of cash
Correction
(Book or Bank)
(Amount credited/ debited)
e.g. Cr. P10,000
(Overstated or Understated)
1.
2.

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