Bank reconciliation statements

Question 1

Define bank statement

Answer 1

Copy of the customer’s account in the books of the bank
Opposite view to the business

Question 2

What are the 5 items not recorded in a cash book?

Answer 2

Bank charges/interest
Dishonoured cheques
Amounts paid directly into bank
Errors on bank statement
Amounts paid by bank to others - debit orders

Question 3

What are the 3 stages in bank reconciliation?

Answer 3

Compare the bank account in the cash book with the bank statement
Update the cash book
Prepare a bank reconciliation statement

Question 4

What does the layout of a bank reconciliation statement look like?

Answer 4

Balance as per bank statement
Add: outstanding deposits
Less: outstanding cheques
Add/less: Bank errors
Balance as per cash book