Bank reconciliation

Question 1

What are post dated EFTs and what do you do with them?

Answer 1

An EFT payment to a client that is recorded in the Cashbook but scheduled for later
payment. This is known as a post-dated EFT and not allowed.

It should be reversed in the Supplementary Cashbook.

Question 2

Debit side of supplementary cash book includes…

Answer 2

1. Balance (favourable/debit) (TRUST)
2. Interest received
3. Direct deposit by / from a client
4. Electronic transfer (EFT) by / from a client
5. Reverse post-dated EFT payment
6. Stop order received
7. Firm Errors

Question 3

Credit side of supplementary cash book includes…

Answer 3

1. Balance (overdrawn)
2. Interest paid
3. Bank / service charges
4. Stop / debit order paid by bank on your behalf.
5. Deposit / Stop order received earlier
   has been reversed by the bank
6. Firm errors

Question 4

How to PREPARE THE BANK RECONCILIATION STATEMENT AND
SUPPLEMENTARY CASHBOOK?

Answer 4

1. Start the supplementary cashbook with the current closing balance in
   the cashbook.
2. Start the bank reconciliation statement with the current closing balance on the bank statement.
3. Items appearing in the cashbook but not yet on the bank statement will
   be shown in the bank reconciliation statement along with bank errors –> record these
4. Items appearing on the bank statement but not yet in the cashbook will be recorded in the supplementary cashbook along with bank errors –> record these
5. Place all that you have recorded in the respective accounting books
6. Balance the supplementary cashbook and bank reconciliation
   statement. The respective balances should correspond.

Question 5

What is important to remember about interest?

Answer 5

• Interest on overdraft is a credit in the Supp CB
• Interest receieved is a debit in the supp CB

Question 6

What is important to remember about bank/service charges?

Answer 6

These CANNOT be paid for in trust –> error