3.6 Bank Reconciliation Flashcards

1
Q

What are receipts and payments treated as in the business’s book ? ( 2 )

A
  1. Receipts on Debit side
  2. Payments on Credit Side

Bank Account

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2
Q

What are receipts and payments treated as in bank ? ( 2 )

A
  1. Receipts on Credit side
  2. Payments on Debit side

Bank Statement

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3
Q

What are the reasons that the balances of the Bank account are not the same as the bank statement ?
( 3 )

A
  1. Items recorded in the business Cash Book but not shown on Bank Statement
    • Unpresented Cheque
    • Uncredited Deposits
  2. Items recorded in Bank Statement but not recorded in Cash Book
    • Credit Transfer
    • Direct Debits
    • Standing Orders
    • Dishonoured Cheque , etc.
  3. Errors or omissions made by business or / and bank
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4
Q

What are the business deposits regarded as by the bank ?

A
  1. Liabilities
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5
Q

What are the accounts open in order to lodge day to day receipts and issue cheques ?

A
  1. Current Account
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6
Q

What are credit transfers?

A
  1. Deposits made directly into business bank account
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7
Q

What are direct debits ?

A
  1. Instruction to bank to make payments of varying amounts from business bank account
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8
Q

What are standing orders ( 2 )

A
  1. Instruction to bank to make fixed payments at regular intervals
  2. It was also known as banker’s order
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9
Q

Where does the balance of the Bank Overdraft record in the business cash book and at Bank Statement ?

A
  1. Credit side
  2. Debit side
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