Bank Reconciliation

Question 1

Define Bank Reconciliation

Answer 1

Bank Reconciliation is the proces through which checks the accuracy of the buisseness bank statement and ‘Reconcilinggg ‘ any differences between figures

-The poceess if checking that the balance of your cashbok agrees with the balance on your Bank statement.,The Bank Reconciliation is produced in order to check the two gigues match.

Question 2

What is the First step in Preparing a Bank Reconciliation

Answer 2

1.Tick items common in Cashbook And Bank Statement

Question 3

What is the Third step in Preparing a Bank Reconciliation

Answer 3

Identify Items Which remain unticked in the CashBookbut are not in the bankstatement

Question 4

What is the Second step in Preparing a Bank Reconciliation

Answer 4

2.The items whch remain unticked in the Bank Statemnt are used to Update the Cashbook

Question 5

What is the Fourth step in Preparing a Bank Reconciliation

Answer 5

Prepare a Bank Reconciliation to show that the Bank Statement balance will agree to the Cashbook Balance.

Question 6

The Layout of a Bank Reconciliation

Answer 6

Balance at Bank as per the Updated Cashbook
Balance at bank as per updated cash book

Add:Unpresented Cheques
…………………………………..(+)
…………………………………..

Less:Lodgements Outstanding
……………………………………..
………………………………………( -)

Balance as per the Bank Sttement

Question 7

How do you know which side is the unpresented cheuqes on the Cash book

Answer 7

Unpresented Cheques are the Credit Side

Question 8

How do you which ide is the Outstanding Lodgements in the Cashbook

Answer 8

Outstanding Lodgement are on the Debit Side

Question 9

Explain the Term Dishounoured Cheque

Question 10

Explain the term Outstanding Lodgements

Question 11

Explain the term Unpresendted Cheques

Question 12

What are the Benefits of Bank Reconciliation

Answer 12

• It acts as a detterent to fraud(1)Because the Bank Statement is and independant record(1)
• It enables missinf entries in the Cash book to be identified (1) an notified to the bank for correction(1)
• It Enables eerrors i the CashBook to be Identified and Corrected(1)
• It Enables out of date cheues to be identified and written Back
• It Enables Dishounored cheques (1) so the buisseness can seek repayment from the customer
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Question 13

Explain the proccess of reconciling the differences in the cashbook and the Bank Statement

Answer 13

-Tick the items common in the Cashbook and Bank Statement
-Identify items in the Bank Statemtn whih remain unticked
-Update the CashBook to include these changes and balance
-Identify items unticked in the cashbook but not in the Bank Statement
-Complete a Bank reonciliation statement by adding unpresented cheques and subtracting Lodgements.