From page 4-4 of the VLN, in a bank reconciliation how are outstanding deposits treated? Group of answer choicesA. Add to the company cash ledger balanceB. Subtract from the company cash ledger balanceC. Add to the bank statement balanceD. Subtract from the bank statement balance Bank ReconciliationTiming differences and/or ErrorsBANK'S RECORDСOMPANYCOMPANY'S RECORDBANKThe bank statement represents thebank's record of the company's accountat the bank.The company's cash account in thegeneral ledger is the company'sАСCOUNTBoth records are record of the company's bankkeeping track of account.this account.The bank statement shows the endingbalance of the account before the bankThey should be The cash account shows the endingthe same.balance before it is reconciled. It isaccount is reconciled. It is the balancethe balance before reconciliation.before reconciliation.The goal is to get both documents to be the same, by including everything, and fixing errors wherethey exist.Bank ReconciliationBank StatementCompany's Cash LedgerBalance Before reconciliationBalance Before reconciliation+ outstanding deposits- outstanding checks+Notes received/collected by bank+Interest received+/- bank errors-NSF checks-unrecorded debit cards and EFTS-Bank service fees+/- company errorsBalance After reconciliationBalance After reconciliationBank Account (Statement)Company Cash Account (Ledger)+/- items that are recorded in the Company +/- items that are recorded on the Bank|Cash account (ledger) but HAVE NOT been Statement but HAVE NOT been recorded in therecorded on the Bank statement. Examples:|- outstanding checks+ outstanding deposits (deposits in transit)|Company Cash account (ledger). For example:|+Notes received/collected by bank|+Interest received|-NSF checks|-unrecorded debit cards and EFTS|-Bank service feesFix errors where they existFix errors where they existThe goal is to get both to be the same (by including everything); they both represent theCompany's bank account.After the bank reconciliation is completed, make sure to recordthe changes made to the cash account.I II| | O

Answered: From page 4-4 of the VLN, in a bank…

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter6: Cash And Receivables

Section: Chapter Questions

Problem 24E

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From page 4-4 of the VLN, in a bank reconciliation how are outstanding deposits treated? Group of answer choices A. Add to the company cash ledger balance B. Subtract from the company cash ledger balance C. Add to the bank statement balance D. Subtract from the bank statement balance

Bank Reconciliation
Timing differences and/or Errors
BANK'S RECORD
СOMPANY
COMPANY'S RECORD
BANK
The bank statement represents the
bank's record of the company's account
at the bank.
The company's cash account in the
general ledger is the company's
АСCOUNT
Both records are record of the company's bank
keeping track of account.
this account.
The bank statement shows the ending
balance of the account before the bank
They should be The cash account shows the ending
the same.
balance before it is reconciled. It is
account is reconciled. It is the balance
the balance before reconciliation.
before reconciliation.
The goal is to get both documents to be the same, by including everything, and fixing errors where
they exist.
Bank Reconciliation
Bank Statement
Company's Cash Ledger
Balance Before reconciliation
Balance Before reconciliation
+ outstanding deposits
- outstanding checks
+Notes received/collected by bank
+Interest received
+/- bank errors
-NSF checks
-unrecorded debit cards and EFTS
-Bank service fees
+/- company errors
Balance After reconciliation
Balance After reconciliation
Bank Account (Statement)
Company Cash Account (Ledger)
+/- items that are recorded in the Company +/- items that are recorded on the Bank
|Cash account (ledger) but HAVE NOT been Statement but HAVE NOT been recorded in the
recorded on the Bank statement. Examples:
|- outstanding checks
+ outstanding deposits (deposits in transit)
|Company Cash account (ledger). For example:
|+Notes received/collected by bank
|+Interest received
|-NSF checks
|-unrecorded debit cards and EFTS
|-Bank service fees
Fix errors where they exist
Fix errors where they exist
The goal is to get both to be the same (by including everything); they both represent the
Company's bank account.
After the bank reconciliation is completed, make sure to record
the changes made to the cash account.
I II| | O

Expert Solution

Meaning of BRS

By summarizing banking and commercial activity, a bank reconciliation statement reconciles an entity's bank account with its financial records. The statement includes all of the deposits, withdrawals, and other transactions made in a bank account during a certain period of time. The reconciliation statement is primarily used to identify inconsistencies between bank and book balances, as well as to perform any necessary modifications or corrections. An accountant creates reconciliation statements once a month.

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