FINANCIAL ACCT-CONNECT
FINANCIAL ACCT-CONNECT
8th Edition
ISBN: 9781266627903
Author: Wild
Publisher: INTER MCG
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Chapter 6, Problem 4PSB

1.

Summary Introduction

Introduction: Bank reconciliation statements means to reconcile entities’ or organization’s bank accounts and its financial statements. By reconciling the bank accounts and financial statements of the organization it outlines the withdrawals and deposits and other activities relating to the bank account which affects the financial status of the organizations. Bank reconciliation is a part of internal control system which helps to detect fraud.

To determine: To reconcile the bank balance and pass journal entries.

1.

Expert Solution
Check Mark

Answer to Problem 4PSB

By bank reconciliation statements organization financial dealings and errors can be seen. Bank reconciliation will make sure of the errors that occurred in bank accounts or financial statements of the organization.

Explanation of Solution

    ParticularsAmountParticularsAmount
    Bank statement balance46822.40Book balance32878.30
    Add: Deposit in transit9583.10Add: Bank collection of note receivable19000
    Error in posting9
    56405.551887.3
    Deduct:Deduct:
    Outstanding cheque 12734589.30NSF Cheque745
    Outstanding cheque 1282400Collection expenses20
    Outstanding cheque 1242410.40Bank service charge17.50
    Miscellaneous charges99
    Adjusted bank balance51005.8Adjusted book balance51005.8

2.

Summary Introduction

Introduction: Bank reconciliation statements means to reconcile entities’ or organization’s bank accounts and its financial statements. By reconciling the bank accounts and financial statements of the organization it outlines the withdrawals and deposits and other activities relating to the bank account which affects the financial status of the organizations. Bank reconciliation is a part of internal control system which helps to detect fraud.

To determine: To reconcile the bank balance and pass journal entries.

2.

Expert Solution
Check Mark

Answer to Problem 4PSB

By bank reconciliation statements organization financial dealings and errors can be seen. Bank reconciliation will make sure of the errors that occurred in bank accounts or financial statements of the organization.

Explanation of Solution

Journal entries for company’s books of accounts:

    DateParticularsAmountAmount
    31 DecCash A/c9
    To office expense A/c9
    ( Being amount erroneously recorded )
    31 DecCustomer A/c745
    Bank A/c17.50
    To Cash A/c762.5
    ( Being dishonored cheque and processing fee recorded)
    31 DecBank Charges99
    To Cash99
    ( Being cheque printing charges recorded)
    31 DecCash A/c 19000
    To Customer A/c19000
    ( Being collection by the bank recorded)
    31 DecBank Charges20
    To Cash A/c20
    ( Being bank charges levied recorded)

3.

Summary Introduction

Introduction: Bank reconciliation statements means to reconcile entities’ or organization’s bank accounts and its financial statements. By reconciling the bank accounts and financial statements of the organization it outlines the withdrawals and deposits and other activities relating to the bank account which affects the financial status of the organizations. Bank reconciliation is a part of internal control system which helps to detect fraud.

To determine: To reconcile the bank balance and pass journal entries.

3.

Expert Solution
Check Mark

Answer to Problem 4PSB

By bank reconciliation statements organization financial dealings and errors can be seen. Bank reconciliation will make sure of the errors that occurred in bank accounts or financial statements of the organization.

Explanation of Solution

Debit Memorandum:

By sending the debit memorandum to customers, bank means to reduce the balance available in customer account. As by sending this bank signifies to that customer is unaware of it. Following entries may be recorded for same:

  1. Bank charges levied by bank for providing services.
  2. Customers dishonored cheques.
  3. Collection of notes on behalf of client.

Credit Memorandum:

This is as opposite of debit memorandum this denote increased balance in customer account. Following entries may be specified for the same:

  1. Reserved bank charges.
  2. Collecting note behalf of client.

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Students have asked these similar questions
ht = ences X On December 1, Jasmin Ernst organized Ernst Consulting. On December 3, the owner contributed $84,920 in assets to launch the business. On December 31, the company's records show the following items and amounts. Cash withdrawals by owner Consulting revenue Salaries expense Cash $ 8,450 Accounts receivable 16,950 Office supplies 4,080 Rent expense Land 46,020 Office equipment 18,860 Telephone expense Accounts payable 9,280 Owner investments 84,920 Miscellaneous expenses $ 2,930 16,950 4,420 7,900 860 680 Exercise 1-18 (Algo) Preparing an income statement LO P2 Using the above information prepare a December income statement for the business. ERNST CONSULTING Income Statement Revenues Rent expense Salaries expense Telephone expense Total revenues $ 4,420 7,900 860 $ SA Assets Cash 8,450 Accounts receivable 16,950 Office supplies 4,080 Land 46,020 Office equipment 18,860 navable 9,280 13,180 5 11 of 14 Next >
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