Chapter#3B: Reconciling the Bank Account

Question 1

What is Bank Reconciliation?

Answer 1

it allows companies to verify that the company’s bank account is accurate

Question 2

What is a Bank Reconciliation Statement?

Answer 2

its used to account for all outstanding deposits, outstanding checks, bank charges, automatic monthly payments, bank errors and items omitted from the company’s books

Question 3

What is one reason for doing Bank Reconciliation?

Answer 3

Because Banks can make mistakes

Question 4

What 2 Journals do you use to reconcile your bank account?

Answer 4

Cash Receipts and Cash Disbursements

Question 5

What is the first step in reconciling the bank account?

Answer 5

to record the balances from the bank statement and general ledger bank account on the bank reconciliation statement

Question 6

What is Outstanding Deposits

Answer 6

It’s when all deposits recorded in the cash receipts journal haven’t been deposited in the bank account

Question 7

What is Outstanding Checks?

Answer 7

its when all checks have been written and are recorded in your Cash Disbursements Journal but do not appear on the Bank Statement

Question 8

When does Outstanding Checks occur?

Answer 8

when the payee has not cashed or deposited the check in their bank account

Question 9

What Items must be recorded in the General Ledger account since they have not been recorded?

Answer 9

the items listed on the right side of the bank reconciliation statement