CDA COLLEGE
ACC101: BOOK KEEPING II
Lecture 10
Lecturer: Kleanthis Zisimos
Lecture Topic List
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Bank Reconciliation statement
Quick review on Bank account
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What is a bank account?
Is it a current asset or a fixed asset?
Debit or credit side?
Recording transactions to the bank account
What is a bank reconciliation
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A bank reconciliation is a comparison of a bank
statement (sent monthly from your bank) with
the bank account in the books of the company.
The bank reconciliation is needed in order to
identify and adjust the differences between the
two statements
Discussion example on the board
Differences between Bank
statement and Bank account
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1.
2.
3.
4.
Differences between Bank statement and Bank
account may occur due to the following
reasons
Unpresented checks
Uncleared deposits
Bank charges or interests
Errors in recording a transaction
Bank reconciliation statement
The bank reconciliation statement is computed
for the correction of errors and adjustment of
the differences. It has the following form
PART 1
Bank statement amount
X
Less: Unpresented checks
(X)
Add. Uncleared deposits
X
X
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Bank reconciliation statement
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The results from part 1 should be equal with the
results of part 2
PART 2
Bank account amount
Less: Bank charges or interests
Adjustment of errors
X
(X)
X
X
Discussion Exercise
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1.
2.
3.
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5.
On 31 March 2010 the company’s bank account
showed a debit balance of € 5000. The bank
statement of March which was sent by the bank had a
credit balance of 5600 . Make the bank reconciliation
statement noting the following points
Bank charges € 200 were not recorded in the books
A check for € 1000 was not shown in the bank statem.
A check deposit was not cleared in the bank for 500
A check for € 400 was not shown in the bank statem.
A check payment of 100 to a supplier was wrongly
recorded to the books of the company as a cash
payment