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The Book-keepers Forum -> General Book-keeping & Accounting -> Bank and cash book reconciliations
Post Info TOPIC: Bank and cash book reconciliations
BJA


Veteran Member

Status: Offline
Posts: 53
Date:
Bank and cash book reconciliations
 

Good morning,

Is there some sort of approach that I should follow when doing bank and cash book reconciliations.....Questions like the one below completely confuses me....

The following information relates to a bank reconciliation.

1. the bank balance in the cashbook before taking the items below into account was $8979 overdrawn

2. bank charges of $550 on the bank statement have not been entered in the cashbook

3. the bank has credited the account in error with $425 which belongs to another customer

4. cheque payments totalling $3275 have been entered in the cashbook but have not been presented for payment

5. cheques totalling $5380 have been correctly entered on the debit side of the cashbook but have not been paid in the bank.

What was the balance as shown by the bank statement before taking the above items into account.

This is just an example....how shall I approach these sort of questions.

Any tips and tricks of the trade?

BJ



__________________
MarkS


Guru

Status: Offline
Posts: 984
Date:
 

Hi There

Normally approach to a bank reconciliation is

 

Balance per cash book                             £a

Adjust for errors in cash book                   £b

Adjusted cash book                                  £c

 

Balance per bank statement                      £v

Adjust for errors in bank statement            £x

Add outstanding lodgements                     £y

Less outstanding cheques                         £z

Adjusted bank statement                          £c

 

Using your figures below

 

Cash book balance                                          (8979)

Bank charges in Bank not in cashbook               (500)

Adjusted cash book                                         (9479)

 

 

Balance per bank statement                              £x

Bank credit in error                                         (425)

Outstanding cheques                                      (3275)

Outstanding lodgements                                  5380

Adjusted bank statement                                (9479)

 

Therefore your unknown bank statement figure must be (11,159) by inference.  ie $11,159 overdrawn

Hope this helps

Regards

MarkS

 



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www.stewartaccountingservices.co.uk

Providing bookkeeping, accounting and taxation services to small and medium sized businesses.
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