Bank Reconciliation Statement Flashcards
(15 cards)
What is an unpresented cheque?
Cheques paid out to creditors/employables but not yet brought to the bank for payment
What is an undeposited cheque?
A cheque that is received and lodged with the bank but haven’t been credited by the bank
What is the difference between a bank account and bank statement?
A bank account is the business’ record of banking activities and a bank statement is the bank’s record of the business’ banking activities/bank account.
What is the Cash Book?
The cash book is the business’ record of their bank account.
Fill in the blank: Whenever money is ____ into a bank account, the bank ___ the account and any ___ is recorded as a debit.
Whenever money is deposited into a bank account, the bank credits the account and any withdrawal is recorded as a debit.
Fill in the blank: A ___ balance in the Cash Book is ___ to a ___ balance in the ___ ___.
A debit balance in the Cash Book is equivalent to a credit balance in the Bank Statement
Fill in the blank: A credit balance in the Cash Book, i.e a ___ ___ , is equivalent to a ___ balance in the ___.
A credit balance in the Cash Book, i.e a bank overdraft, is equivalent to a debit balance in the Bank Statement.
What is meant by “The bank knows, the business doesn’t know”?
This means that information is shown on the bank statement but not on the cash book.
What is meant by, “The business knows, the bank doesn’t know”?
This means that, information is shown on the cash book not on the bank statement.
What are bank charges?
These are small withdrawals the bank makes for its services and may deposit any interest earned on accounts.
What are standing orders?
The business may have instructed the bank to deduct fixed amounts from the account for regular expenses.
What is a credit transfer or a bank giro credit?
The transfer of money from one account to another without the use of cheques aka wire transfers.
What are direct debits?
The business may have instructed the bank to allow a beneficiary to claim payments on the business’ account.
What are dishonoured cheques?
Cheques the bank refuses to pay.
What are some reasons for a dishonored cheque?
Missing information, insufficient funds, words and figures not matching, stale cheque (over 6 months old)
