a.
A bank reconciliation statement is prepared to project the causes of the difference between the bank account balance as per the bank statement and the bank balance as per the accounting records. There can be multiple reasons why these two balances may appear to be different. Some of the examples may be that checks issued but not cleared by the bank, checks received from the customer deposited into the bank but not reflected in the statement, check from a customer returned due to insufficiency of funds, direct debit due to bank charges, etc.
The ending balance as per the bank statement and the accounting records should be the starting point and all the necessary adjustments are to be made to or from both of these balances to arrive at a common balance called Adjusted Balance. While arriving at the uniform adjusted balance proves the accuracy of the bank reconciliation statement.
Requirement 1
To prepare:
The bank reconciliation statement of Severino Co. as of December 31st.
b.
The month-end journal entries are required to be passed for only those entries affecting the accounting balance for adjusting the book balance to the reconciled balance. These entries will alter the cash balance and bring it up to the adjusted or reconciled balance.
Requirement 2
To prepare:
The journal entries as of December 31st register the reasons for differences between the balance as per the statement and as per the books.

Want to see the full answer?
Check out a sample textbook solution
Chapter 6 Solutions
FINANCIAL&MANAGERIAL ACCT.-CONNECT ONLY
- provide correct answerarrow_forwardInternal control refers to the processes and procedures implemented by an organization to ensure the integrity of financial and accounting information, promote accountability, and prevent fraud. These controls are designed to provide reasonable assurance that the organization achieves its objectives in operational efficiency, financial reporting reliability, and compliance with laws and regulations. Internal control is a comprehensive system that includes a variety of checks and balances, such as segregation of duties, authorization and approval processes, reconciliations, and physical security measures. It is an integral part of an organization's governance framework, helping to safeguard assets, improve operational efficiency, and ensure accurate and timely financial reporting. Respond to the above postarrow_forwardI need the correct answer to this general accounting problem using the standard accounting approach.arrow_forward
- You are a team of accounting consultants hired by the company VinGrenDom Ltd., a regional utility and manufacturing firm expanding into the Eastern Caribbean. The Board of Directors is requesting an accounting report that addresses three critical areas in their financial statements. Part A: Working Capital 1. Define working capital and explain its importance in financial health and liquidity management. 2. Assess how the matching concept and accrual basis affect the reporting of current assets and liabilities. 3. Using a hypothetical balance sheet (you may create one), identify at least 5 current assets and 5 current liabilities and analyze how changes in these elements affect liquidity ratios. 4. Recommend at least two strategies VinGrenDom Ltd. can implement to optimize working capital.arrow_forwardProvide best solution accountingarrow_forwardGeneral Accounting solve this problemarrow_forward
- Explain the theoretical concepts underlying equity (e.g., residual interest, stewardship, and proprietary theories)arrow_forwardGeneral Accounting Questionarrow_forwardSea Harbor, Inc. has a marginal tax rate of 35 percent and an average tax rate of 22 percent. If the firm earns $79,500 in taxable income, how much will it owe in taxes? a. $10,335. b. $16,695. c. $17,490. d. $27,030. e. $27,825.arrow_forward
- Financial AccountingAccountingISBN:9781337272124Author:Carl Warren, James M. Reeve, Jonathan DuchacPublisher:Cengage LearningCentury 21 Accounting Multicolumn JournalAccountingISBN:9781337679503Author:GilbertsonPublisher:Cengage
- Financial And Managerial AccountingAccountingISBN:9781337902663Author:WARREN, Carl S.Publisher:Cengage Learning,College Accounting (Book Only): A Career ApproachAccountingISBN:9781337280570Author:Scott, Cathy J.Publisher:South-Western College PubCollege Accounting (Book Only): A Career ApproachAccountingISBN:9781305084087Author:Cathy J. ScottPublisher:Cengage Learning



