3. 11 Bank Reconciliation Statements Flashcards
- What is bank statement?
a statement issued by the bank to show the balance in a bank account and the amount that has been paid into it and withdrawn from it./
A bank statement is the record of the transactions made by an account holder over a period of time.
- What is clear?
Is when a cheque or payment clears when the money is sent from one bank to another.
- What is a bank reconciliation statement?
A statement comparing the cash book balance with the bank statement balance.
- What is an unpresented cheque?
Unrepresented cheque is a cheque that has not yet cleared through the banking system because cheque paid to supplier has not been presented to the bank.
- What outstanding lodgment?
Lodgement is when a receipt that has been entered in the cash book but has not yet appeared on the bank statement.
- What is a dishonored cheque?
a cheque that the bank will not pay because there is not enough money in the account to pay it. or due to no signatures, or mismatched figures
- What are the 5 reasons for differences in the bank statement balance and business’s cash book balance?
-direct debits
- standing orders
- bank charges
- interest
- What is direct debits?
Direct debit is when a business gives permission for an organization to collect variable amounts owing directly from its bank amount.
- What is standing orders?
Standing order is when a business instructs a bank to pay a specified fixed amount on a given date
- What is bank charges?
Bank charges are costs charged by the bank: overdraft fees/cost to maintain the account.
- What is interest?
Interest received by the organization from the bank.
- What are the 4 benefits of bank reconciliation statement
- errors in the cash book can be identified.
- Identifies omitted entries in the cash book.
- can be able to detect fraud.
- Identifies errors made by the bank.
