Course 4 Flashcards
If your account balances don’t match at the end of the month, what are a few ways to fix that
Go line by line comparing ledger entries with the external account statement
Check the balance difference and cross-reference for missing transactions of that amount
Check for transposition errors (number amounts being flip flopped)
True or False: The month-end close-out process for certain accounts is considered a type of reconciliation.
True
5 Steps of Reconciliation
Step 1 - Compare internal accounts to external account statements
Step 2 - Ensure all outgoing funds are reflected on the cash account
Step 3- Ensure all incoming funds are reflected on the cash account
Step 4- Errors and corrections
Step 5- Balance
Name a few common errors
Verify correct account, overlooked transactions (atm fees, direct deposit), look for reversed transactions, Duplicated transactions, Transposed numbers
Describe Verify correct account
Make sure you are on the correct bank account with the correct statement
Describe Reversed transactions
Entered a transactions opposite to intended amount. -100 rather than 100
Describe Transposed numbers
Entering two digits in a flipped position. 19.93 - 19.39
Balance Sheet Approach
Go through each account on the balance sheet and have an external document row by row
Source documents
Proof a transaction has actually happened ( original records)
Name 6 few source documents
Bank statements, Invoices, Credit memos, Employee Time Cards, Deposit Slips, Purchase Memos, Packing Slip, Sales Order
Report Reconciliation
using a balance sheet to compare numbers with bank statements documents, used when there is no source document that would fit. Accounts payable do not get monthly reports on remaining balance
Transactional Reconciliation
Going row by row and compare with source documents
