PROOF OF CASH
Two-date bank reconciliation = the bank reconciliation is so-called “two-date: because it literally
involves two dates.
The procedures followed for a one-date reconciliation are the same for a two-date bank reconciliation.
A two-date bank reconciliation becomes complicated only when certain facts or data are omitted, hence
the necessity for computing them.
But if all the facts are available, then reconciliation statements will simply be prepared as of the two
dates prepared.
Among others, the omitted information may be any one or a combination of the ff:
a.) Book Balance – beg. and end.
b.) Bank Balance – beg. and end.
c.) Deposit in transit – beg. and end.
d.) Outstanding Checks – beg. and end.
If the ending bal. are not given, the ff. formulas may help. If beg. bal. are omitted, the formulas should
simply be reversed or just work back.
Computation of Book Balance
Balance per book – beg. of month
Add: Book debits during the month
Total
Less: Book credits during the month
Bal. per book – end of month
xx
xx
xx
xx
xx
Book debits = refer to cash receipts or all items debited to the cash in bank acc.
Book credits = refer to cash disbursements or all items credited to the cash in bank acc.
In a T-account form, the cash in bank may appear as follows:
CASH IN BANK
Balance – beg.
xx
Book credits
xx
Book debits
xx
Bal. – end.
xx
Computation of bank bal.
Bal. per bank – beg. of month
xx
Add: Bank credits during the month
xx
Total
xx
Less: Bank debits during the month
xx
Bal. per bank – end of month
xx
Bank credits – refer to all items credited to the amount of the depositor which includes deposits
acknowledged by bank and credit memos.
In the absence of any statement to the contrary, bank credits are assumed to be deposits
acknowledged by bank.
Bank debits – refer to all items debited to the acc. of the depositor which includes checks paid by the
bank and debit memos.
In the absence of any statement to the contrary, bank debits are assumed to be checks paid by bank.
In a T-account form, the depositor’s acc., Company X, will appear as follows:
Company X
Book debits
xx
Bal. – beg.
xx
Bal. – end.
xx
Bank credits
xx
Computation of deposit in transit
Deposit in transit – beg. of month
xx
Add: Cash receipts deposited during the month
xx
Total deposits to be acknowledge by the bank
xx
Less: Deposits acknowledge by bank during month
xx
Deposit in transit – end of month
xx
Computation of outstanding checks
Outstanding checks – beg. of month
xx
Add: Checks drawn by depositor during the month
xx
Total checks to be paid by bank
xx
Less: Checks paid by bank during the month
xx
Outstanding checks – end of month
xx