BANK RECONCILIATION

Question 1

is a legal tender that can be used to exchange goods, debt, or services. It is one of the most important
assets of a business.

Answer 1

Cash

Question 2

are money in the form of paper or coins, usually issued by a government and generally accepted at its face value as a method of payment

Answer 2

Currencies and coins

Question 3

is a certificate usually issued by governments and banking institutions, that allows the stated payee to receive cash-on-demand

Answer 3

Money order

Question 4

refers to a negotiable instrument that can be used as payment that is guaranteed by the issuing
bank. The total amount of the draft is drawn from the requesting payer’s account—their bank account
balance decreases by the money withdrawn from the account—and is usually held in a general ledger
account until the payee cashes the draft.

Answer 4

Bank drafts

Question 4

is a small amount of cash kept on hand to pay for minor expenses, such as office supplies
or reimbursements

Answer 4

Petty cash fund

Question 4

is a fund that is continually replenished as withdrawals are made such as a working capital fund.

Answer 4

Revolving fund

Question 5

is a set amount of money used to make change for customers who pay for purchases with cash.

Answer 5

Change fund

Question 5

Types of Bank Accounts

Answer 5

Savings account.
Checking or current account.
Time deposit.

Question 6

This is the simplest bank account. The business deposits money in the bank for safekeeping. The account may have a minimum balance requirement to earn a minimal interest. Some savings accounts use a passbook for cash deposits and cash withdrawals

Answer 6

Savings account

Question 7

it is one where the depositor can issue bank checks, signing the same, and giving the check to the payee for encashment or for deposit within a bank.

Unlike savings account, this accounts rarely earn interests because of the fast turnover of transactions.

Answer 7

Checking or current account.

Question 7

This type of bank deposit is evidenced by a formal agreement embodied in an instrument called certificate of deposit.

Answer 7

Time deposit

Question 8

This slip documents the deposit transactions, which is filled out by the depositor

Answer 8

Deposit Slip

Question 9

Bank Forms

Answer 9

Deposit Slip
Withdrawal Slip
Bank Check

Question 10

two (2) kinds of deposit slip

Answer 10

(1) cash deposit slip
(2) check deposit slip

Question 11

is a bank form filled out by the account holder that instructs the bank to pay the designated payee indicated on the check on or after the date specified on the check.

Answer 11

Bank check

Question 11

In this slip slip documents the withdrawal from a passbook account. It is a bank form filled out by the account holder. Unlike deposit transactions, only the account holder may withdraw from his account.

Answer 11

Withdrawal Slip

Question 12

shows the beginning balance, additions, deductions and the ending balance of the depositor’s account.

Answer 12

Bank Statement

Question 13

A ______________ is an analysis of the items and amounts that result in the cash balance reported in the bank statement (balance per bank statement) to differ from the balance of the cash account in the ledger (balance per books)

Answer 13

bank reconciliation

Question 14

A________________ is a statement which brings into agreement the cash balance per book and cash balance per bank

Answer 14

bank reconciliation

Question 14

Book reconciling items

Answer 14

Credit memos
Debit memos
Errors
Deposits in Transit
Outstanding Checks

Question 15

These are book reconciling items not representing deposits credited by the bank to the account of the depositor but not yet recorded by the depositor as cash receipts

Answer 15

Credit memos

Question 16

his is a type of credit memo that will appear on the bank statement when a bank gives a company interest on its account balances

Answer 16

Interest earned

Question 17

These are book reconciling items not representing checks paid by the bank which are charged or debited by the bank to the account of the depositor but not yet recorded by the depositor as cash disbursements.

Answer 17

debit memo

Question 17

This is a type of reconciliation where the bank will increase the company’s checking account for the amount it collected (principal and interest) and will
decrease the account by the collection fee it charges.

Answer 17

Notes receivable collected by bank

Question 18

It represents a check that the bank did not honor because the depositor’s checking account balance was insufficient to cover the check.

Answer 18

NSF check

Question 18

This type of debit memo comprises fees deducted from the bank statement for the bank’s processing of the checking account activity

Answer 18

Bank service charges

Question 19

This type of debit memo occurs when a company arranges for its bank to handle the reordering of its checks. The cost of the printed checks will automatically be deducted from the company’s checking account.

Answer 19

Check printing charges

Question 19

These are book reconciling items which represent the errors made by the accountant or another
person in charge during the bookkeeping proces

Answer 19

Errors

Question 20

These checks are already recorded by the depositor as cash disbursements but not yet reflected on the bank statement

Answer 20

Outstanding Checks

Question 20

This form starts with the cash balance per ledger (or per books) and reconciled to the balance per bank
statement

Answer 20

Book Balance to Bank Balance Method

Question 20

These are collections already recorded by the depositor as cash receipts but not yet
reflected on the bank statements

Answer 20

Deposits in Transit

Question 21

This form reconciles the bank balance to the unadjusted balance of the depositor’s cash account in the general ledger.

This is the form frequently used by many auditors to trace the accounting entries taken up
by the company’s bookkeeper.

Answer 21

Bank Balance to Book Balance Method

Question 21

Forms of Bank Reconciliation Statement

Answer 21

Bank Balance to Book Balance Method
Book Balance to Bank Balance Method
Adjusted Balances Method

Question 22

The book section contains items that the depositor has not yet recognized, and any corrections for errors
made on the depositor’s books