Bank Reconciliation Statements

Question 1

Purpose

Answer 1

To check that the banks records are correct
To check that the Cash Ledger is correct
13.9.1 - required for client account monthly

Question 2

Reasons for variance

Answer 2

. Mistakes
. Cheques - written and recorded on ledger but not banked by recipient - “unpresented cheques”
. Money received but not paid into bank account until a after bank statement produced “late credits”
. Accidentally omitted entries - bank charges, DD’s, bank interest
. Receipts paid into bank together in one lump

Question 3

Form

Answer 3

Harry Elms Office Bank Recon Statement as at 30 Sept

Balance as per bank statement £6,300.00
Less: Unpresented cheques
9441 Stationary £5.00
9442 Stamps £3.00
(£8.00)
£6,292.00
Add: Late Credits
2132 Capital introduced £5000.00
2133 Electricity refund £ 100.00
£5,100.00
Balance as per Cash Account £11,392.00

Question 4

How to prepare

Answer 4

. Get cash ledger, latest bank statement, last months bank recon statement
. Work from bank statement
. Tick all items on bank statement that are on ledger or last months bank recon statement
. Check if a single entry on bank statement relates to more than one entry on ledger. If so, tick them off
. Unticked items on bank statement = bank charges, interest, DD;s etc? Write these on cash edger (and other corresponding ledger) but date as last day of month. Inc original date in description column
. Remaining unticked items on cash ledger = late credits and unpresented cheques - make a list
. Draft bank recon statement