From page 4-4 of the VLN, what is the goal of a bank reconciliation? Group of answer choices A. To make sure the company cash account is increasing. B. To make sure the company is profitable. C. To make sure the bank records and our company records are the same. D. To make sure the bank is competitive with other banks.
From page 4-4 of the VLN, what is the goal of a bank reconciliation? Group of answer choices A. To make sure the company cash account is increasing. B. To make sure the company is profitable. C. To make sure the bank records and our company records are the same. D. To make sure the bank is competitive with other banks.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
From page 4-4 of the VLN, what is the goal of a bank reconciliation?
Group of answer choices
A. To make sure the company cash account is increasing.
B. To make sure the company is profitable.
C. To make sure the bank records and our company records are the same.
D. To make sure the bank is competitive with other banks.

Transcribed Image Text: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
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Step 1 Introduction
The bank reconciliation statement is prepared to equate the balances of cash book and passbook with various adjustments.
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