FINANCIAL ACCOUNTING - INVESTMENT IN EQUITY SECURITIES A PROJECT OF BARTERS PH Contributed by: Vince Anthony Feir Bank reconciliation Nsf checks--checks paid to client but returned by bank and was not credited due to insufficient funds Is a statement that brings into agreement the balance of cash per book and balance of cash per bank in which the difference was brought about by timing or errors Per book- the balance of cash in bank that is being kept in the books of the company normal balance is dr Per bank- the balance of the deposited cash that is being kept by the bank that reflects the amount due to a client normal balance is cr Book reconciling items--these are items that are adjusted to the cash in bank balance of the company to arrive at the adjusted balance at the end of the period Credit memos Bank credits- accounts that increases the amount of the cash deposited in the bank other than deposits Collections by the bank- payments made to the bank by the customers of the client or collected by the bank in behalf of the client Loan Proceeds--deposits made by the bank for a loan of the client Debit memos Bank debits- bank deductions to the deposited account that does not reflect on the books of the client due to timing differences Bank service charge--charges made by the bank for the service rendered to client like cost of checks etc. Errors- mistakes or omissions made by the client subject to analyzation for the effect Bank Reconciling Statement- these are items adjusted to the balance per bank to arrive at the adjusted balance of cash in Bank at the end of the period FINANCIAL ACCOUNTING - INVESTMENT IN EQUITY SECURITIES A PROJECT OF BARTERS PH Contributed by: Vince Anthony Feir Deposits in transit--cash collections in the custody of the client yet to be deposited to the bank or collections already deposited, but yet to be credited by the bank. Outstanding checks- checks issued for disbursements but yet to be presented to the bank for payment Adjust: For any errors found Equals: Adjusted Cash Balance X company(Bank) Add: Deposit in Transit RELEVANT CHECKS Less: Outstanding Checks Certified Checks- checks that were already debited by the bank even before issue Adjust: for any errors Equals: Adjusted Cash Balance Stale checks- check issued by the client, but not encashed within a reasonable amount of time(6 months) this check reverses the previous effect of payment Note: Cib adj Balance=X Company adj Balance Voided Checks- Checks that cancels the effect of the payment Bank to Book From Bank Statement to the unadjusted CiB balance Procedures X Company End Balance Add: Debit Memos Adjusted Balance Method Less: Credit Memos Add: Deposits in Transit Cash in Bank(Book) Less: outstanding checks Add: Credit Memos <Collections, Proceeds> Adjust: any errors Less: Debit Memos <Bank Service Charge, NSF Checks> Equals: Unadjusted balance per book FINANCIAL ACCOUNTING - INVESTMENT IN EQUITY SECURITIES A PROJECT OF BARTERS PH Contributed by: Vince Anthony Feir Book to bank CiB Add: Outstanding Checks Less: Deposits in transit Add: Credit Memos Less: Debit Memos Equals: Unadjusted balance per bank
