Bank Reconciliation Basics

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Questions and Answers

What is the total adjusted balance reported?

₱600,000

₱410,000

₱205,000

₱570,000 (correct)

A debit memo increases the cash recorded in the accounting records.

False

How much did Blue Sky Co. add as deposits in transit for the reconciliation?

₱205,000

The amount of credit memos recorded is _____?

₱60,000 Signup and view all the answers

Match the following transactions with their corresponding effects on cash in the bank:

Credit memo = Increases cash balance Debit memo = Decreases cash balance Outstanding checks = Decreases available cash Deposits in transit = Increases reported cash Signup and view all the answers

What is the purpose of preparing a bank reconciliation statement?

To compare cash balances and adjust them Signup and view all the answers

Bank reconciliations should be prepared on a quarterly basis.

False Signup and view all the answers

What is added to the balance per bank statement when preparing a bank reconciliation?

Deposits in transit Signup and view all the answers

What does 'Balance per bank statement, end' refer to?

Ending cash balance in the bank statement as of August 31, 2016 Signup and view all the answers

Credit memos are deductions made by the bank to the depositor’s account.

False Signup and view all the answers

The adjusted cash balance is shown in the financial statements as _____ cash balance.

correct Signup and view all the answers

Match the following components of a bank reconciliation statement to their descriptions:

Credit memos = Amounts credited to the bank account by the bank Outstanding checks = Checks issued but not yet cleared by the bank Debit memos = Amounts debited from the bank account by the bank Deposits in transit = Cash deposits made but not yet recorded by the bank Signup and view all the answers

What are automatic debits in the context of bank transactions?

Payments made automatically by the bank on behalf of the depositor. Signup and view all the answers

Which item would be subtracted from the balance per bank statement during reconciliation?

Outstanding checks Signup and view all the answers

Payments of __________ represents payment of loan made from the depositor's bank account.

loans Signup and view all the answers

A business with multiple bank accounts needs to prepare one bank reconciliation statement for all accounts.

False Signup and view all the answers

Match the following terms with their definitions:

Credit Memos = Additions to a depositor's account Debit Memos = Deductions from a depositor's account NSF Check = Insufficient funds check Book Errors = Errors made by the depositor in their accounting books Signup and view all the answers

Which of these examples qualifies as a credit memo?

Collections made by the bank on behalf of the depositor Signup and view all the answers

Define 'balance per books' in the context of a bank reconciliation statement.

The cash balance in the accounting records as of the end of the current month. Signup and view all the answers

Book errors refer to inaccuracies made by the bank in transaction records.

False Signup and view all the answers

What is a no sufficient funds (NSF) check?

A check returned due to insufficient funds in the drawer's account. Signup and view all the answers

What are deposits in transit?

Deposits made but not yet received by the bank Signup and view all the answers

Outstanding checks are checks that have already been cashed by the bank.

False Signup and view all the answers

What are the two types of bank reconciling items mentioned?

Deposits in transit and outstanding checks Signup and view all the answers

Certified checks are checks that the bank has __________, reducing the depositor's account balance.

certified Signup and view all the answers

Which of the following items is deducted from the balance during bank reconciliation?

Outstanding checks Signup and view all the answers

Banks assume direct liability for certified checks.

True Signup and view all the answers

What happens to stale checks in terms of bank reconciliation?

They are reverted back to cash balance. Signup and view all the answers

What is the balance after the deposit on May 11?

₱1,390,000.00 Signup and view all the answers

A check was encashed on May 15 for ₱31,905.00.

False Signup and view all the answers

What is the account type for the account number 8121-0008-48?

BPI Checking account Signup and view all the answers

The beginning balance is ______.

₱560,000.00 Signup and view all the answers

Match the check numbers with their respective amounts:

Check #1109 = ₱109,000.00 Check #1110 = ₱200,000.00 Check #1111 = ₱80,000.00 Check #1112 = ₱280,000.00 Signup and view all the answers

What is the total amount of deposits made on May 10 and May 11 combined?

₱830,000.00 Signup and view all the answers

The final balance for the account at the end of the period is ₱881,000.00.

True Signup and view all the answers

What date was Check #1111 issued?

May 21 Signup and view all the answers

What is the amount of the outstanding checks for Blue Sky Co. as per the bank reconciliation?

₱80,000 Signup and view all the answers

The balance per books for Blue Sky Co. at the end is ₱939,095.

False Signup and view all the answers

What is the total amount of deposits in transit for the month ended May 31, 2020, for Blue Sky Co.?

₱160,000 Signup and view all the answers

ABC Co. had a returned NSF check amounting to _____ that needs to be recorded.

₱150,000 Signup and view all the answers

Match the following items with their respective definitions:

Outstanding Checks = Checks issued but not yet cleared the bank Deposits in Transit = Deposits recorded but not yet reflected in the bank statement Debit Memos = Deductions in the bank statement reflecting fees or charges Credit Memos = Additions in the bank statement reflecting collections or deposits Signup and view all the answers

What was the cash balance per books for ABC Co. as of November 30, 2020?

₱500,000 Signup and view all the answers

The bank collected ₱640,000 from a customer, comprising ₱600,000 principal and ₱40,000 interest for ABC Co.

True Signup and view all the answers

What was the amount of credit memos added to the adjusted balance for Blue Sky Co.?

₱90,000 Signup and view all the answers

Study Notes

Course Information

Course Title: Fundamentals of Accountancy, Business and Management 2
Grade Level/Section: ABM-12
Subject Teacher: [Name not available]
University: University of the Cordilleras
Location: Baguio City

Bank Reconciliation Statement

Purpose: To reconcile cash balances per bank statement and company books
Objectives:
- Explain reasons for bank reconciliation
- Analyze bank and book reconciling items
- Prepare bank reconciliation statement and journal entries
Monthly Preparation: Reconciliations are done monthly when bank statements are received.
Multiple Accounts: Separate reconciliations are done for each account.
Format:
- Beginning balance per books
- Add: Credit memos
- Less: Debit memos
- Add/less: Book errors
- Balance per bank statement
- Add: Deposits in transit
- Less: Outstanding checks
- Add/less: Bank errors
- Adjusted balance
Credit memos: Additions to account not yet recorded by company (e.g., collections, interest)
Debit memos: Deductions to account not yet recorded by company (e.g., service charges, NSF checks)
Deposits in transit: Deposits made but not yet recorded by the bank
Outstanding checks: Checks written but not yet cashed by the recipient
Book Errors: Errors on company books
Bank Errors: Errors on bank's records
Reconciling items: Items used to reconcile bank and book balances.
- Book reconciling items: Credit memos, debit memos, book errors
- Bank reconciling items: Deposits in transit, outstanding checks, bank errors

Additional Information

Payment of loans: Direct payments from bank account
Book errors: Clerical errors on the company's books
Bank Errors: mistakes made by the bank
Outstanding checks: Exclude certified checks and stale checks
Stale checks: Already recorded and excluded as outstanding from the company's records
Certified checks are already deducted from the account

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Description

Test your knowledge on the essentials of bank reconciliation. This quiz covers key concepts such as adjusted cash balances, deposits in transit, and the importance of preparing bank reconciliation statements. Perfect for students and professionals looking to refresh their understanding of banking transactions.

Bank Reconciliation Basics

Choose a study mode

Podcast

Questions and Answers

What is the total adjusted balance reported?

A debit memo increases the cash recorded in the accounting records.

How much did Blue Sky Co. add as deposits in transit for the reconciliation?

The amount of credit memos recorded is _____?

Match the following transactions with their corresponding effects on cash in the bank:

What is the purpose of preparing a bank reconciliation statement?

Bank reconciliations should be prepared on a quarterly basis.

What is added to the balance per bank statement when preparing a bank reconciliation?

What does 'Balance per bank statement, end' refer to?

Credit memos are deductions made by the bank to the depositor’s account.

The adjusted cash balance is shown in the financial statements as _____ cash balance.

Match the following components of a bank reconciliation statement to their descriptions:

What are automatic debits in the context of bank transactions?

Which item would be subtracted from the balance per bank statement during reconciliation?

Payments of __________ represents payment of loan made from the depositor's bank account.

A business with multiple bank accounts needs to prepare one bank reconciliation statement for all accounts.

Match the following terms with their definitions:

Which of these examples qualifies as a credit memo?

Define 'balance per books' in the context of a bank reconciliation statement.

Book errors refer to inaccuracies made by the bank in transaction records.

What is a no sufficient funds (NSF) check?

What are deposits in transit?

Outstanding checks are checks that have already been cashed by the bank.

What are the two types of bank reconciling items mentioned?

Certified checks are checks that the bank has __________, reducing the depositor's account balance.

Which of the following items is deducted from the balance during bank reconciliation?

Banks assume direct liability for certified checks.

What happens to stale checks in terms of bank reconciliation?

What is the balance after the deposit on May 11?

A check was encashed on May 15 for ₱31,905.00.

What is the account type for the account number 8121-0008-48?

The beginning balance is ______.

Match the check numbers with their respective amounts:

What is the total amount of deposits made on May 10 and May 11 combined?

The final balance for the account at the end of the period is ₱881,000.00.

What date was Check #1111 issued?

What is the amount of the outstanding checks for Blue Sky Co. as per the bank reconciliation?

The balance per books for Blue Sky Co. at the end is ₱939,095.

What is the total amount of deposits in transit for the month ended May 31, 2020, for Blue Sky Co.?

ABC Co. had a returned NSF check amounting to _____ that needs to be recorded.

Match the following items with their respective definitions:

What was the cash balance per books for ABC Co. as of November 30, 2020?

The bank collected ₱640,000 from a customer, comprising ₱600,000 principal and ₱40,000 interest for ABC Co.

What was the amount of credit memos added to the adjusted balance for Blue Sky Co.?

Study Notes

Course Information

Bank Reconciliation Statement

Additional Information

Studying That Suits You

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