ACC205 Week 2 Discussions and Responses.docx

Again good post wainwright sked 2012 principles of

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revenue. Again, good post! Wainwright, S.K.(Ed.). (2012). Principles of Accounting: Volume 1. Retrieved from Discussion 2
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What is the purpose of a bank reconciliation? What are the reasons for differences between the cash reported in the accounting records, and the cash balance in the bank statements? My Response Banks reconciliations can be set up differently (no right or wrong way) or the bank reconciliation format worksheet can be used, however, they all serve the same purpose. A bank reconciliation is intended for the purpose of comparing bank statement amounts like the deposits, checks, balances and other events that have taken place to the actual cash amount based on the records kept by the company. “Identified differences help isolate errors and adjustments.” Wainwright, (Ed.). (2012). With the ability to compare the two, any errors are easier to locate and then corrected. There are times when there are differences between the cash reported on the accounting records and the cash balance on the bank statements. When banks have not recorded certain items, but these items are reflected on company records, such as checks that have been returned because of nonpayment, or fees and service charges, accounts that have earned interest, notes and drafts cash collections, receipts added to company records, or errors made by the bank cause these differences on the accounting record and the cash balance on the bank statements. Wainwright, S. K. (Ed.). (2012). Principles of Accounting: Volume I [Electronic version]. Retrieved from Discussion 2 Response 1 Torina Wrote Hello Loahna, Awesome break down of a bank reconciliation. It's definitely important to remember when dealing with the bank balance that all uncleared checks, deposits, or any fees are accounted for. I don't believe that if a discrepancy is found that it can be written off because someone will have to account for the amount that is missing. My Response Thank you Torina, I am understanding what I am reading, however, I am seriously struggling with the required assignments (putting it to paper/computer). I think I out think myself and then I am confused (week 1). I do understand that the bank reconciliation is important, and not just bookkeeping. When bank statements and the bank records of actual cash on hand is not all accounted (does not add up) for then the reconciliation is a way of finding the problem and correcting it. “the purpose of the reconciliation is to compare amounts on the bank statement (the document provided by the bank showing deposits, checks, other activity and balances) with the cash amount contained in the company records.”
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