8AyRequired informationA bank reconciliation proves the accuracy of the depositor's and the bank's records. The bank statement balance isadjusted for items such as outstanding checks and unrecorded deposits made on or before the bank statement date butnot reflected on the statement. The book balance is adjusted for items such as service charges, bank collections for thedepositor, and interest earned on the account.Steps in Preparing Bank Reconciliation:1. Enter bank balance taken from the bank statement.2. Add unrecorded deposits and bank errors understating the bankbalance.3. Subtract any outstanding checks and bank errorsoverstating the bank balance from the bank balance.4. Compute the adjusted bank balance.5. Enter cash account book balance taken from the accountingrecords.6. Add any unrecorded cash receipts and errors understating the bookbalance to the book balance.7. Subtract any unrecorded bank fees, NSF checks, and errorsoverstating the book balance and deduct them from the book balance.Knowledge Check 01DMatch the term and the definition 8AyRequired informationA bank reconciliation proves the accuracy of the depositor's and the bank's records. The bank statement balance isadjusted for items such as outstanding checks and unrecorded deposits made on or before the bank statement date butnot reflected on the statement. The book balance is adjusted for items such as service charges, bank collections for thedepositor, and interest earned on the account.Steps in Preparing Bank Reconciliation:1. Enter bank balance taken from the bank statement.2. Add unrecorded deposits and bank errors understating the bankbalance.3. Subtract any outstanding checks and bank errorsoverstating the bank balance from the bank balance.4. Compute the adjusted bank balance.5. Enter cash account book balance taken from the accountingrecords.6. Add any unrecorded cash receipts and errors understating the bookbalance to the book balance.7. Subtract any unrecorded bank fees, NSF checks, and errorsoverstating the book balance and deduct them from the book balance.Knowledge Check 01DMatch the term and the definition

Bank Reconciliation Statement :— It is the statement that shows reconciliation of balance as per…

Knowledge Check 01 Match the term and the definition. DEFINITION 1. Subtract outstanding checks from the bank balance. 2. Compute the adjusted bank balance. 3. Enter the bank statement balance from the bank statement. 4. Add any unrecorded deposits to the bank balance. 5. Compute the adjusted book balance. 6. Add any unrecorded interest earned to the book balance. 7. Enter the company's book balance from its accounting records. 8. Subtract bank fees from the book balance. TERM Step 1 Step 2 Step 3 Step 4 S

Knowledge Check 01 Match the term and the definition. DEFINITION 1. Subtract outstanding checks from the bank balance. 2. Compute the adjusted bank balance. 3. Enter the bank statement balance from the bank statement. 4. Add any unrecorded deposits to the bank balance. 5. Compute the adjusted book balance. 6. Add any unrecorded interest earned to the book balance. 7. Enter the company's book balance from its accounting records. 8. Subtract bank fees from the book balance. TERM Step 1 Step 2 Step 3 Step 4 S

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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Assign the letter to indicate whether the following items would be added from the company's books or the bank statement during the construction of a bank reconciliation. Clear All Charges for some other company's safe deposit box were posted to your account A $1,000 note from one of Added to the bank your customers was statement balance collected by the bank Added the company's Interest revenue earned by books the note above EFT deposit from a customer
Which of the following items that appeared on the bank reconciliation did not require a journal entry? Select one: A. bank service charges B. deposits in transit C. Not sufficient funds(NSF) checks D. a check for $630, recorded in the check register for $360
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Which one of the following would not appear on a bank statement for a checking account? a.Deposits b.Service charges c.Outstanding checks d.Interest earned
During a bank reconciliation process, Oa. outstanding checks and deposits in transit are subtracted from the bank statement balance Ob. outstanding checks are added and deposits in transit are subtracted from the bank statement balance Oc. outstanding checks and deposits in transit are added to the bank statement balance Od. outstanding checks are subtracted and deposits in transit are added to the bank statement balance
When a company records a bank deposit, it will: O A. credit the Cash account on the company's books. O B. debit the Accounts Receivable account on the company's books. OC. debit the Cash account on the company's books. O D. credit the Accounts Payable account on the company's books.
What item on the bank statement that may differ from the company's financial records. NSF check interest earned outstanding checks service charge
In preparing a bank reconciliation, the amount of outstanding checks is added to the balance per bank statement. OTrue False
More info a. Outstanding checks, $670. b. Deposits in transit, $1,500. C. NSF check from customer, no. 548, for $175. d. Bank collection of note receivable of $800, and interest of $80. Interest earned on bank balance, $20. e. f. g. h. Service charge, $10. The business credited Cash for $200. The correct amount was $2,000. The bank incorrectly decreased the business's by $350 for a check written by another business. X
Which of the following is a book reconciling item? a.notes receivable collected by the bank b.cash on hand awaiting deposit c.collections already forwarded to the bank for deposit but too late to appear in the bank statement d.Checks drawn and already given to payees but not yet presented for payment