Concept explainers
1.
Introduction:
To determine: To reconcile the bank balance and pass
1.
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
Particulars | Amount | Particulars | Amount |
Bank statement balance | 46822.40 | Book balance | 32878.30 |
Add: Deposit in transit | 9583.10 | Add: Bank collection of note receivable | 19000 |
Error in posting | 9 | ||
56405.5 | 51887.3 | ||
Deduct: | Deduct: | ||
Outstanding cheque 1273 | 4589.30 | NSF Cheque | 745 |
Outstanding cheque 1282 | 400 | Collection expenses | 20 |
Outstanding cheque 1242 | 410.40 | Bank service charge | 17.50 |
Miscellaneous charges | 99 | ||
Adjusted bank balance | 51005.8 | Adjusted book balance | 51005.8 |
2.
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.
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:
Date | Particulars | Amount | Amount |
31 Dec | Cash A/c | 9 | |
To office expense A/c | 9 | ||
( Being amount erroneously recorded ) | |||
31 Dec | Customer A/c | 745 | |
Bank A/c | 17.50 | ||
To Cash A/c | 762.5 | ||
( Being dishonored cheque and processing fee recorded) | |||
31 Dec | Bank Charges | 99 | |
To Cash | 99 | ||
( Being cheque printing charges recorded) | |||
31 Dec | Cash A/c | 19000 | |
To Customer A/c | 19000 | ||
( Being collection by the bank recorded) | |||
31 Dec | Bank Charges | 20 | |
To Cash A/c | 20 | ||
( Being bank charges levied recorded) | |||
3.
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.
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:
- Bank charges levied by bank for providing services.
- Customers dishonored cheques.
- 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:
- Reserved bank charges.
- Collecting note behalf of client.
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Chapter 6 Solutions
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