Chapter 8, Problem 8CCCP

To determine

Bank reconciliation:

Bank reconciliation can be defined as the process wherein the balances in the accounting records of a firm are matched for a cash account to the corresponding information on a bank statement. Its primary objective is to determine the differences between the balances of the two.

Procedure for debiting and crediting an account:

• Increase in assets account, increase in expenses account, and decrease in liabilities account should be debited.
• Decrease in assets account, increase in revenue account, and increase in liabilities account should be credited.

All transactions affect the accounting equation that is displayed below. The accounting equation should always remain in balance at the time of recording a business transaction:

$\text{Asset = Liabilities + Stockholders' equity}$

To prepare: The bank reconciliation statement and adjusting entries at June 30 for Cookie Creations.