Module 13 - Bank Reconciliations

Question 1

If bank statement shows a debit under balance it means…

Answer 1

Negative balance

A credit is positive money, i.e. a good thing…

Question 2

If your internal records are wrong…

Answer 2

You need to fix your internal ledgers

Question 3

If the bank statements are wrong…

Answer 3

Bank must fix it

Question 4

Computerised accounting systems will reconcile automatically

Question 5

If bank error…

Answer 5

No journal entry is required to fix it

Question 6

If error in own records…

Answer 6

A journal entry is required to fix this

Question 7

Timing differences:

Outstanding receipts…

Answer 7

A cheque or a branch deposit made that is yet to clear the bank statement

Money in… But not yet in the statement or in the bank settled

Question 8

Timing differences:

Outstanding payments

Answer 8

Cheque issued, BACS payment instructed, or CHAPS transfer that is yet to clear the bank statement

Question 9

Timing differences do not require correction

Question 10

Transaction types

Answer 10

BACS - Electronic transfer, within 3 days to clear, eg. Payroll salaries

CHAPS - Payments by electronic transfer to be received the same day guaranteed

Charge FEE - Monthly charges for provision of account, charges for transactions, interest on overdrafts or exceeding

Cheque - Written order for an account holder

Deposit - Cash deposit made in bank branch into a bank account

Direct debit - Instruction that authorises an organisation to collect varying amounts of money from an account by electronic transfer

Faster payments service - real time transfers eg. Internet banking

Interest - Bank interest earned by a customer on a bank balance

Pay mobile - App, MPI (in), MPO (out)

Point of sale - Location in which payment is accepted, a debit card payment

Standing order - Instruction to a bank to pay a set amount at regular intervals by electronic transfer