LESSON
GRADE 11
10
WEEK 4 - Lesson 2 of 4
BANK RECONCILIATION
ACTIVITY 7
The information provided was drawn from the accounting records of Mabena’s Traders on 31
August 2013.
REQUIRED
1 Complete the Cash Journals for August 2013.
2 Draw up the Bank Account for August 2013 and balance it properly.
3 Prepare the Bank Reconciliation Statement on 31 August 2013.
Information
1. Bank Reconciliation Statement of Mabena’s Traders on
31 July 2013
Favourable balance as per bank statement
22 275
Deposit not yet credited by the bank
10 600
Outstanding cheques
Dated
Number
30 June 2013
501
4 750
31 July 2013
514
6 750
10 September 2013
519
13 875
Balance as per Bank account
?
2. The following totals appeared in the Cash Journals prior to receiving the August bank
statement:
CRJ
CPJ
R135 800
R153 225
10 ACCOUNTING GRADE 11
CAPS
1
3. A comparison of the August 2013 Bank Statement with the Bank Reconciliation Statement
for July 2013 and the Cash Journals for August 2013 revealed the following differences:
● Entries on the August 2011 bank statement which did not appear in the August 2013
cash journals:

▪
Cheque no 514 for R6 750.
▪
Deposit of R10 600.
▪
A deposit of R 725 made on 25 August 2013 by a debtor C Coetzer, in part
settlement of his account.
▪
Unpaid cheque for R3 425. This cheque was received from our tenant, T. Tau.
▪
A debit order of R575 in favour of Super Insurers to pay the personal insurance
of the owner.
▪
A credit of R250 made by Sun Bank being monthly interest on the fixed deposit.
▪
The following charges were made by Sun Bank:
♦
Government levy on debit entries
R 37
♦
Interest charged on debit balances
R350
♦
Cash handling fee
R 75
♦
Service fees
R363
Entries in the August 2013 Cash Journals which did not appear in the August Bank
Statement :
▪
▪
A deposit of R26 900 made on 31 August 2013.
The following cheques which were issued:
♦
No. 541 [dated 15 September 2013]
R12 800
♦
No. 549 [dated 29 August 2013]
R 2 225
4. Additional information
● An investigation revealed that cheque no. 503 for R14 825 issued in favour of a
creditor, ABC Traders, in part payment was incorrectly recorded as R13 475. The
wrong cheque counterfoil was captured.
● Cheque no. 501 for R4 750 was issued as a donation to Child Welfare. The cheque
was misplaced by them. The cheque must be cancelled. The donation was increased
and on 28 August 2013 cheque no. 553 for R6 250 was issued. The cheque was
delivered to Child Welfare on 3 September 2013. No entries have been made for any
of these transactions.
● The Bank Statement received from Sun Bank showed an overdraft of R8 375 on
31 August 2013.
10 ACCOUNTING GRADE 11
CAPS
2
ANSWER
Cash Receipts Journal of Mabena Traders for August 2013
Sundry Accounts
Doc. D
Details
Fol
Bank
Amount
Details
31 Totals
b/f
135 800
Crescent Welfare
4 750 4 750 Donation
Cash Payments Journal of Mabena Traders for August 2013
Sundry Accounts
Doc. D
Details
Fol
Bank
Amount
Details
31 Totals
b/f
153 225
T. Kruger [Ch. R/D]
3 425
 3 425 Rent Income


Superior Insurers
575

575 Drawings
Bright Bank
475

475 Bank Charges 
Welfare
6 250 Donation
6 250
165 650
General Ledger of Mabena Traders
Dr
Bank Account
Aug 1 Balance
3 Total receipts
1
Balance
b/
d
CR
J
c/
d
 Au
7 500 g

141 525
3 Total
1 payments
B8
CP
J
165 650
165 650
Se
p
CAPS

16 625
165 650
10 ACCOUNTING GRADE 11
Cr
1 Balance
b/
d

16 625
3
Bank Reconciliation Statement of Mabena Traders on 31 August 2013
Debit
Credit
 8 375
Dr Balance as per bank statement
 26 900
Cr Outstanding deposit
Dr Outstanding cheques
Number
519

13 875
541

12 800
549

2 225
553

6 250
16 625
Cr Balance as per Bank account

If both totals are the same
10 ACCOUNTING GRADE 11
CAPS
43 525
43 525
4
LESSON
ANSWERS
10
Cash Receipts Journal of Mabena Traders for August 2013
Sundry Accounts
Doc. D
Details
Fol
Bank
Amount
Details
31 Totals
b/f
135 800
BS
C. Coetzer

725
725 Debtors’ Control
BS
Sun Bank 
250
250 Interest on Fixed Deposit
501
Child Welfare 
4 750
4 750 Donation
141 525
Cash Payments Journal of Mabena Traders for August 2013
Sundry Accounts
Doc. D
Details
Fol
Bank
Amount
Details
31 Totals
b/f
153 225
BS
T. Tau [Ch. R/D] 
3 425  3 425 Rent Income 
BS
Super Insurers 
575  575 Drawings

BS
Sun Bank

475  475 Bank Charges 
BS
Sun Bank
350  350 Interest on Overdraft
503
ABC Traders 
1 350  1 350 Creditors’ Control

553
Child Welfare 
6 250
6 250 Donation
165 650

General Ledger of Mabena Traders
Dr
Aug 1
Balance
31 Total
receipts
Balance
b/d
CRJ
c/d
Bank Account
 Aug 31 Total
7 500
payments

141 525
16 625
B8
CPJ
165 650
Sep 1
10 ACCOUNTING GRADE 11
CAPS
Balance
b/d
Cr

165 650
165 650

16 625
5
Bank Reconciliation Statement of Mabena Traders on 31 August 2013
Debit
Dr Balance as per bank statement
Credit
 8 375
 26 900
Cr Outstanding deposit
Dr Outstanding cheques
Number
519

13 875
541

12 800
549

2 225
553

6 250
Cr Balance as per Bank account
16 625
43 525
10 ACCOUNTING GRADE 11
CAPS
43 525
6
PROCEDURE FOR DIFFERENT ENTRIES IN BANK RECONCILIATION
Transaction
Entry in the books of the business
1. Bank charges on the bank statement
Example
The following debits appeared on the bank statement:
Service fees
R60
Cash deposit fee R75
Cash Payment Journal
BS
Second Bank(60 + 75)
2. Interest on the bank statement
Bank
Sundry accounts
135
135
Bank charges
Cash Payment Journal
2.1 - Interest expense
BS
Second Bank
Bank
Sundry accounts
35
35
Interest on overdraft
Example
The following debit appeared on the bank statement:
Interest R35
Cash Receipt Journal
2.2
-
Interest income
Example
The following credit appeared on the bank statement:
Interest R40
BS
Second Bank
3. Direct deposit on the bank statementExample
A debtor, S Smit, paid his account directly into the bank
account, R260.
10 ACCOUNTING GRADE 11
CAPS
Bank
Sundry accounts
40
40
Interest on current account
Cash Receipt Journal
Bank
BS
S Smit
260
Sundry accounts
260
Debtors control
7
Transaction
Entry in the books of the business
4. Stop orders/ debit orders on the bank
statement
Example
The bank statement showed a stop order, R380, in favour of
Outsurance for a payment on an insurance premium.
Cash Payment Journal
BS
Outsurance
5. Dishonoured cheque
Bank
Sundry accounts
380
380
Insurance
Cash Payment Journal
Cheque received
BS
B Baloyi (R/D cheque)
Bank
Sundry accounts
400
400
Debtors control
Example
The following cheque appeared on the bank statement
No 400 - B Baloyi R400 (insufficient funds)
It was previously received from B Baloyi, a debtor, in
settlement of his account.
Procedure:
Cancel in CPJ
6 Stale cheque: (cheque issued)
Cash Receipt Journal
no
Cheque issued
322
Example
6 months after the cheque has been issued, it still does not
appear in the bank statement
Tshwane Metro
(stale cheque)
Bank
Sundry accounts
450
450
Rates
Procedure:
Cancel in CRJ
10 ACCOUNTING GRADE 11
CAPS
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Transaction
7 Stale cheque:
Entry in the books of the business
(cheque received)
Cash Payment Journal
Cheque received
Example
Deposited the stale cheque (older than 6 months) when
received.
BS
E Els (R/D cheque)
Bank
Sundry accounts
280
280
Debtors control
It now appears in the bank statement as unpaid (R/D)
Procedure:
Cancel in the CPJ
Request a new cheque
8 Lost cheque: (cheque issued)
Example
Cheque no 430 does not appear in the bank statement.
The cheque got lost in the post.
Cash Receipt Journal
350
M Maseko
(lost cheque)
Bank
Sundry accounts
350
350
Procedure:
Cancel in CRJ
Issue a new cheque (if instructed)
Procedure
1 Issue new cheque no 469 in CPJ
2 Record new cheque as “ outstanding cheque” in the
Bank Reconciliation statement at the end of that month.
Cash Payment Journal
469
M Maseko
Bank
Sundry accounts
350
350
Creditors control
Bank Reconciliation statement
Debit
Debit outstanding cheque no 469
10 ACCOUNTING GRADE 11
CAPS
Credit
350
9
Transaction
Entry in the books of the business
9 Errors in the CPJ :
Cash Payment Journal
When the amount of the cheque in the bank
statement is correct
Bank
475
KK Suppliers
90
(understated 980 – 890)
Sundry accounts
90
Creditors control
(a) understated
(amount is less than it should be)
Example
Cheque number 475 issued to KK Suppliers appeared in the
Cash Payment Journal as R890 and in the bank statement as
R980. The amount in the bank statement is correct.
Procedure
1 Calculate the difference R980 – R890 =R90 less than
It should be.
2 Enter the difference in the same journal (CPJ)
Cash Receipt Journal
(b) overstated
(amount is more than it should be)
487
Example
Cheque number 487 issued to WW Wholesalers appeared in
the Cash Payment Journal as R900 and in the bank
statement as R800. The amount in the bank statement is
correct.
WW Wholesalers
(overstated, 900-800)
Bank
Sundry accounts
100
100
Creditors control
Procedure
1 Calculate the difference R900 – R800 =R100 more than it
should be.
2 Enter the difference in the opposite journal (CRJ)
10 ACCOUNTING GRADE 11
CAPS
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Transaction
Entry in the books of the business
10 Post-dated cheques:
Cash Payment Journal
(cheque received and deposited by mistake)
Example
Received post-dated cheque from M Maseko for R250 in
payment of his account and deposited it by mistake
Now it appears on the bank statement as unpaid (R/D)
DS
M Maseko(R/D cheque)
Bank
Sundry accounts
250
250
Debtors control
Procedure
Cancel in the CPJ
11 Post-dated cheques
Bank Reconciliation statement
(cheque issued)
Debit
Procedure at the end of the month
Show as outstanding cheque in bank reconciliation statement
12 Cheques issued in the CPJ
(the cheques were not yet presented for
payment)
Example
The following cheques do not appear on the bank statement
no. 51, R560 and no. 59, R450
Debit outstanding cheque no 440
Credit
560
Bank Reconciliation statement
Debit
Debit outstanding cheques:
no
51
no
59
Credit
560
450
Procedure
Debit the bank reconciliation statement as outstanding
cheques
10 ACCOUNTING GRADE 11
CAPS
11
Transaction
Entry in the books of the business
14 Deposits in the CRJ
(the deposit does not appear on the bank
statement)
Bank Reconciliation statement
Debit
Credit outstanding deposit
Credit
10 800
Example
The deposit made on the last day of month does not appear
on the bank statement, R10 800
Procedure
Credit the bank reconciliation statement as outstanding
deposit
15
Errors on the bank statement
Bank reconciliation statement
(when the errors were made by the bank)
(a) Cheque drawn by another client was
Debit
Credit cheque wrongly debited
Credit
460
debited to our bank account by mistake
Procedure
Credit the bank reconciliation statement:
Bank reconciliation statement
(b) A deposit was credited to our bank account
Debit
by mistake
Procedure
Debit the bank reconciliation statement:
10 ACCOUNTING GRADE 11
CAPS
Debit deposit wrongly credited
Credit
400
12