Bank Reconciliation

Question 1

Use of Bank reconciliation

Answer 1

Is used to agree the balance shown by the bank columns of the cash book with that shown by the bank statement.

Question 2

Definition of Reconcile

Answer 2

Making one thing consistent with another

Question 3

Definition of Unpresented Cheques

Answer 3

These are cheques issued but not yet recorded in the bank statement

Question 4

Definition of Outstanding Lodgements

Answer 4

These are amounts paid into the bank, but not yet recorded in the Bank Statement

Question 5

Reasons why business’s prepare bank reconciliation statements

Answer 5

Helps in stopping accounting fraud and genuine errors, Helps the trial balance statement to agree quickly.

Question 6

Step 1

Answer 6

Spot The Differences between Cash Book and Bank Statement. (Tick/Cross)

Question 7

Step 2

Answer 7

Update the cash book by putting the missing figures from the bank statement into the cash book so the paid out goes in the CR and Paid in goes in the DR.

Question 8

Step 3

Answer 8

Find the total and work out the balance brought down the balance carried down.

Question 9

Step 4

Answer 9

Take ending balance in the bank statement and add the outstanding Lodgements which is ONLY the cash book figures missing in the bank statement and find the Total to add.

Question 10

Step 5

Answer 10

Subtract Only the Unpresented Cheques which is found in the CR column in the Cash book, Find total to subtract

Question 11

Step 6

Answer 11

Take the Total added and subtract the Total to subtract which gives you the balance as per cash book.