Asked by Albatool Ahmed on Jun 13, 2024
Verified
Identify each of the following reconciling items as
(a) an addition to the cash balance according to the bank statement,
(b) a deduction from the cash balance according to the bank statement,
(c) an addition to the cash balance according to the company's records, or
(d) a deduction from the cash balance according to the company's records. Assume that none of the transactions reported by bank debit and credit memos have been recorded by the company. Write "entry" by items that will require a journal entry in the company's accounts.
1.Deposits in transit.
2.Bank service charges.
3.NSF check.
4.Outstanding checks.
5.Check for $690 incorrectly recorded by the company as $960.
6.Check for $420 incorrectly recorded by the company as $240.
Reconciling Items
Entries made to adjust or reconcile differences between two sets of records or accounts.
Bank Statement
A document provided by a bank that summarizes an account holder's financial transactions and balances over a specified period, typically monthly.
Cash Balance
The amount of cash that a company or an individual has available at any given time.
- Identify and explain the components of a bank reconciliation and its importance.
Verified Answer
AS
anudeep salibindlaJun 15, 2024
Final Answer :
1. (a) an addition to the cash balance according to the bank statement
2. (d) a deduction from the cash balance according to the company's records
(entry)
3.(d) a deduction from the cash balance according to the company's records
(entry)
4.(b) a deduction from the cash balance according to the bank statement
5.(c) an addition to the cash balance according to the company's records
(entry)
6.(d) a deduction from the cash balance according to the company's records
(entry)
2. (d) a deduction from the cash balance according to the company's records
(entry)
3.(d) a deduction from the cash balance according to the company's records
(entry)
4.(b) a deduction from the cash balance according to the bank statement
5.(c) an addition to the cash balance according to the company's records
(entry)
6.(d) a deduction from the cash balance according to the company's records
(entry)
Learning Objectives
- Identify and explain the components of a bank reconciliation and its importance.