Chapter 15 - Bank Reconciliations

Question 1

What is the purpose of a bank reconciliation statement?

Answer 1

to check the accuracy of an entity’s bank account record by comparing it with the record of the account maintained by the bank

Question 2

What are the 3 steps for bank reconciliations?

Answer 2

1) Agree the opening balance in the bank statement and cash book
2) Tick off all items in BOTH the cash book and the bank statement and update the cash book of unrecorded items
3) Prepare the bank reconciliation with the remaining unticked items

Question 3

Do uncleared lodgements/deposits get added or reduced from the bank statement reconciliation?

Answer 3

ADD

Question 4

Do unpresented cheques get added or reduced from the bank statement reconciliation?

Answer 4

LESS

Question 5

What are unrecorded items?

Answer 5

items which appear in the bank statement before they are recorded in the cash book (interest , bank charges, dishonered cheques)

Question 6

What are timing differences?

Answer 6

Items have been recorded in cash book, but due to the bank clearing process have not yet been recorded in the bank statement (outstanding/unpresented cheques and outstanding/uncleared lodgements)

Question 7

d4ew3q21QWhat is the 3 steps to petty cash reconciliation?

Answer 7

1) Confirm the balance per the petty cash book
2) Count the cash float on hand. COnfirm value of receipts for amounts reimbursed noted in petty cash book
3) Cash float on hand plus recepts = balance per petty cash book