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Week 5 Bank Reconciliation

Week 5 Bank Reconciliation - Bank Reconciliation A bank...

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12/10/10 Bank Reconciliation A bank reconciliation is prepared periodically to explain the difference between cash reported on the bank statement and the cash balance on company’s books. First National Bank Nashville, TN 37459 May 31, 2006 Clothes Mart Nashville, TN Acct No 278609 Previous Balance Total Checks Total Deposits Current Balance 1488.79 1,367.09 2,604.22 2,725.92 5/1 107 55.00 5/2 1,251.88 5/4 108 279.50 5/7 109 44.75 5/9 110 21.81 5/12 111 37.55 5/15 825.04 5/18 112 175.98 5/21 113 288.31 5/27 114 12.54 5/30 527.30 5/31 115 451.65 Bank Statement GENERAL LEDGER Account: Cash Acct. No. 102 Balance Date Item PR Debit Credit DR (CR) May 31 Balance 2,481.18 Why are the balances different? * P 3
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12/10/10 Reconciling Items Bank Statement Balance l Add : Deposits in transit. l Deduct: Outstanding Checks l Add or Deduct : Book Balance Add : Collections made by the bank. Add : Interest earned on checking account. Deduct : Nonsufficient funds check (NSF). Deduct : Bank P 3
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12/10/10 Bank Reconciliation Two sections: 1. Reconcile bank statement balance to the adjusted bank balance.
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