FABM2 Bank Reconciliation Statement PDF

Republic of the Philippines Enrichment Activities: Department of Education Region III What are the three (5) Steps in bank reconciliation...

Republic of the Philippines Enrichment Activities: Department of Education Region III What are the three (5) Steps in bank reconciliation process? Schools Division Office of Bulacan Step 1_________________________________________ Step 2 ________________________________________ FUNDAMENTALS OF ACCOUNTANCY Step 3 ________________________________________ BUSINESS AND MANAGEMENT 2 Step 4 ________________________________________ Step 5 ________________________________________ Bank Reconciliation References: Statement Fundamentals of Accountancy Business and Management 2 Published by the Commission on Higher Education, 2016 Chairperson: Patricia B. Licuanan, Ph.D. Commission on Higher Education Week 9-10 Teachers Guide K to 12 Transition Program Management Unit ACTIVITY SHEET Office Address: 4th Floor, Commission on Higher Education, C.P. Garcia Ave., Diliman, Quezon City NAME: (1) Valencia, et. al. Basic Accounting 3rd edition 2009-2010, Valencia Educational Supply, 2009. GRADE AND SECTION: (2) Weygandt, J. et. al. Accounting Principles 2010 edition. John Wiley and Sons. DATE OF SUBMISSION: (3) Valix, Conrado T. et. al. Financial Accounting Volume 1 2015 editions. GIC Enterprises & Co. Inc. 2015 (PAGE 1) (Page 16) I. OBJECTIVES Post test 6. If the bank charged for the check plus a bank fee for the checks with A. Content Standards insufficient balance this is called______ a. Not sufficient fund c. No fund The learners demonstrate an understanding of a bank b. Refund d. All of the above reconciliation statement, its nature and structure, and 7. Adjusting the bank balance and book balance are the bank reconciling items and methods of preparation reconciliation process. a. True b. False B. Performance Standards: 8. If a check have been written and recorded in the company's cash account but have not yet cleared the bank account this is called. The learners will be able to solve exercises and problems a. Check balance c. Outstanding balance involving the following: b. Outstanding checks d. All of the above 9. Amounts already received and recorded by the company, but are not 1. Identification of the proper treatment of reconciling items in yet recorded by the bank. the bank reconciliation statement a. Cash in c. Cash balance b. Deposit in transit d. Deposit in bank 2. Preparation of a bank reconciliation statement 10. Deposits in transit an increase to the balance per bank in order to C. MELCs: report the true amount of cash. a. True b. False Describe the nature of bank reconciliation statement 11. Bank balance is adjusted to agree with book balance. Analyze the effect of the reconciling items a. Adjusted method c. book to bank method Prepare a bank reconciliation statement. b. bank to book method d. all of the above 12. The book balance is adjusted to agree with the bank balance. D. Specific Objectives: a. Adjusted method c. book to bank method To identify and understand the contents of a bank b. bank to book method d. all of the above 13. The balances per bank and per book are separately determined. statement a. Adjusted method c. book to bank method b. bank to book method d. all of the above II. CONTENT 14. Monthly preparation of bank reconciliation assists in the regular monitoring of cash flows of a business. Lesson 1 – Bank Reconciliation a. True b. False 15. Methods of adjusting bank reconciliation are; Statement a. Adjusted method c. book to bank method b. bank to book method d. all of the above (Page 2) (Page 15) E. REFLECTION: III. PROCEDURES: A. Preliminary Activities Write in your answer sheet the common 1. Pre-Test reconciling items and discuss their effects in the MULTIPLE CHOICE. Read the following items carefully. Write the letter bank reconciliation statement. of the correct answer in your answer sheet. 1. What will the company do, upon receipt of the bank statement? V. ASSESSMENT (Post Test) a. File the statement c. Throw/Discard MULTIPLE CHOICE. Read the following items carefully. Write the b. Review d. Check and compare with records letter of the correct answer in your answer sheet. 2. If a report compares bank statement balance as per accounting records with the balance stated in the bank statement. 1. What 24 hour teller machine can withdraw funds anytime. a. Bank reconciliation Statement c. Book balance a. Machine teller c. Automated machine b. Bank balance d. Cash Balance b. Automated teller machine d. All of the above 3. A check issued to Meralco by the company to P3,500 and recorded 2. Which written slip are used to take out money from the bank. this as P 350 this case will cause difference between company’s a. Withdrawal c. Cash slip record and the bank record is called. b. Withdrawal slip d. Deposit slip a. Arrears c. Bank errors 3. If a cash account result from the company entering an b. Errors d. Book errors incorrect amount, entering a transaction that does not belong 4. The most vulnerable assets of an entity. in the account. a. Cash c. bank draft a. Errors c. Charges b. Bank withdrawals d. bank debts b. Interest d. All of the above 5. The most commonly used methods in preparing bank statement. 4. If the balance increases the company's cash account on a. Bank to book c. Book to bank its books this is called. b. Adjusted method d. All of the above a. Interest c. Earnings 6. The situation wherein the cash collected will not be reflected in the b. Interest earned d. All of the above bank as deposit but it is however recorded in accounting records of the company. 5. The bank deduct charges or fees on the bank statement without a. Time out c. Time lags notifying the company. b. Time in d. No time a. True b. False 7. Preparation of bank reconciliation helps in the identification of errors in the accounting records of the company or the bank. a. True b. False (Page 14) ( Page 3 )  ( Pre test) 8. Monthly preparation of bank reconciliation assists in the 4. ACTIVITY D regular monitoring of cash flows of a business. Direction: In a separate paper, prepare a bank reconciliation a. True b. False statement for ABM Co. 9. The bank reconciliation method wherein the book balance 1. The bank statement for August, 2019 shows an ending balance is adjusted to agree with the bank balance. of Php 3,490. 2. On August 31 the bank statement shows charges of Php35 for a. Book to bank b. Bank to book the service charge for maintaining the checking account. c. adjusted method d. All of the above 3. On August 28 the bank statement shows a return item of Php100 10. It is normal for a company's bank balance as per plus a related bank fee of Php10. The return item is a customer's accounting records to differ from the balance as per bank check that was returned because of insufficient funds. statement. 4. The bank statement shows a charge of Php80 for check printing a. True b. False on August 20. 11. Amounts already received and recorded by the company, 5. The bank statement shows that Php8 was added to the checking account on August 31 for interest earned by the company during but are not yet recorded by the bank. the month of August. a. Bank Deposit c. Deposits in transit 6. The bank statement shows that a note receivable of Php1,000 was b. Cash in Bank d. Cash on hand collected by the bank on August 29 and was deposited into the 12. Checks that have been written and recorded in the company's account. On the same day, the bank withdrew Php40 company's cash account but have not yet cleared the bank from the company's account as a fee for collecting the note account or presented to the bank by the payee. receivable. a. Cheque c. Post dated checks 7. The company's Cash account at the end of August shows a balance of P 967. b. Outstanding checks d. All of the above 8. During the month of August the company wrote checks totaling 13. Bank recording an incorrect amount, entering an amount more than Php50,000. As of August 31, Php3,021 of the checks that does not belong on a company's bank statement. written in August had not yet cleared the bank and Php200 of a. Bank memo c. bank service checks written in June had not yet cleared the bank. b. Bank errors d. bank overdraft 9. The Php1,450 of cash received by the company on August 31 was 14. Accepting deposits, - posting checks, mailing the bank recorded on the company's books as of August 31. However, the statement are examples of bank. Php1,450 of cash receipts was deposited at the bank on the morning of September 1. a. bank account c. bank service charge 10. On August 29 the company's Cash account shows cash sales of b. bank memo d. bank debit memo Php145. The bank statement shows the amount deposited was 15. The acronym of non sufficient funds. actually Php154. a. NSF c. SFN 11. The company reviewed the transactions and found that Php154 b. FSN d. All of the above was the correct amount. ( Page 4) (Page 13) C. INDEPENDENT ACTIVITIES: 2. Reviewing Previous Lesson: 3. ACTIVITY C 1. Differentiate a savings account from a current or checking Identify whether the following independent transaction is a account book or a bank reconciling. In addition, determine the amount 2. Give the parts of bank deposit and withdrawal slips of the error and state whether the amount will be added or 3. List down parts of bank checks deducted in the preparation of the bank reconciliation (use adjusted method): B. Presenting the new lesson 1. Eagle Repairs received P1,500 from Jane. The bookkeeper recorded the amount as P500. Nature of Bank Reconciliation Statement 2. The deposits of Eagle earned interest of P100 for the month. Eagle does not have knowledge of Bank reconciliation statement is a report which compares interest earned until it receives the bank statement the bank balance as per company's accounting records with the balance stated in the bank statement. 3. The bank teller deducted CK 123 for P3,500 from the account of Eagle. The said check was issued by Egles Company The two common causes of the discrepancy in figures are: a different depositor of the bank. Time lags that prevent one of the parties (company or the 4. The bookkeeper of Eagle recorded Check No. 345 in the Cash bank) from recording the transaction in the same period as the Disbursement Journal as P5,205. other party. The correct amount of the check was P5,250. Errors by either party in recording transactions 5. Nation Bank collected from the customer of Eagle the sum of P5,000 representing payment of the said customer to Eagle. No The importance of Bank Reconciliations are as follows: entry was made in the books of Eagle. Preparation of bank reconciliation helps in the identification of errors in the accounting records of the company or the bank. Cash is the most vulnerable assets of an entity. (page 12) (Page 5 )  If the bank balance appearing in the accounting records can 2. ACTIVITY B : (Written Work / Task) be confirmed to be correct by comparing it with the bank statement balance, it provides added comfort that the bank The cash receipts journal of Masaya Merchandising reflected transactions have been recorded correctly in the company the following collections for the month of records. May, 2019: Monthly preparation of bank reconciliation assists in the regular monitoring of cash flows of a business. Date Official Customer Amount Receipt ACTIVITY 5/2/2019 4171 Joy 4,000 5/8/2019 4172 Aliah 2,000 1. Motivation 5/9/2019 4173 Andrea 8,900 GUESS THE BANK 5/25/2019 4174 Angela 7,800 5/26/2019 4175 Alpha 3,200 5/31/2019 4176 Ayesha 4,780 5/31/2019 4177 Angelo 4,500 It is the policy of the company to deposit collection within the following day from the date of collection. The bank statement for the month of May, 2019 revealed the following deposits made. 1.________ 2.___________3.__________ 4. _________5.____________ Deposit Date Amount 5/3/2019 4,000 5/9/2019 2,000 5/10/2019 8,900 5/26/2019 7,800 5/26/2019 3,200 Instruction: Compute for the deposit in transit or undeposited collection as of end of May, 2019. 6.________________7._____________8._______9.___________ (page 6) (Page 11)  ANALYSIS: Processing questions: A. “Upon receipt of a bank statement, what do you think the will the company do?” B. What are the contents of a bank reconciliation statement? C. What is the purpose of a bank reconciliation statement? C. INDEPENDENT ACTIVITIES (Formative) 3. ABSTRACTION (Discussion of the Topic) 1. ACTIVITY A For the month of May 2019, Pet Company issued the following checks as recorded in its Cash Disbursement Journal: The most common format of a bank reconciliation statement is shown below: Check Date Check No. Payee Amount RSS COMPANY 5/2/2019 3456 Jaja 2,000 BANK RECONCILIATION STATEMENT 5/10/2019 3457 Paula 300 April 30, 2020 5/15/2019 3458 Coleen 4,500 5/18/2019 3459 Sofia 8,700 Unadjusted Book balance P xx Unadjusted Bank Balance P xx 5/30/2016 3460 Franches 1,200 Bank Debit Memo Deposit in Transit xx NSF Check xx Printing Charge xx As per the bank statement received by Pet for the month of Bank Credit Memo May,2019, the following checks were presented and paid by the Collection xx bank. Errors xx Outstanding Checks xx Adjusted Book Balance xx Adjusted Bank Balance xx Check No. Payee Amount 3456 Jaja 2,000 The key terms to be aware of when dealing with a bank 3459 Sofia 8,700 reconciliation are: 3460 Franches 1,200 Deposits in transit are amounts already received and recorded by the company, but are not yet recorded by the Instruction: Identify checks outstanding as of end of May 2019. bank. ( Page 10) ( Page 7) 3. Discussion of the Topic: (ABSTRACTION) The cost of the printed checks will automatically be deducted from the company's checking account. Outstanding checks are checks that have been written and recorded in the company's Cash account but have not yet cleared Interest earned will appear on the bank statement when a bank the bank account or presented to the bank by the payee. gives a company interest on its account balances. The amount is added Bank errors are mistakes made by the bank. Bank errors could to the checking account balance and is automatically on the include the bank recording an incorrect amount, entering an bank statement. amount that does not belong on a company's bank statement, or omitting an amount from a company's bank statement. Notes Receivable are assets of a company. When notes come due, the company might ask its bank to collect the notes receivable. Bank service charges are fees deducted from the bank For this service the bank will charge a fee. statement for the bank's processing of the checking account Errors in the company's Cash account result from the company activity entering an incorrect amount, entering a transaction that does Examples: not belong in the account, or omitting a transaction that should - accepting deposits, be in the account. - posting checks, - mailing the bank statement, Other types of bank service charges include the fee charged when a company overdraws its checking account and the bank fee for processing a stop payment order on a company's check. NSF check is a check that was not honored by the bank of the person or company writing the check because that account did not have a sufficient balance. As a result, the check is returned without being honored or paid. Check printing charges occur when a company arranges for its bank to handle the reordering of its checks. (Page 8) (Page 9)