Chapter 11 - Reconcilliations Flashcards
1
Q
What are contra entries?
A
May arise when a customer is also a supplier. In which case the balances cancel each other
2
Q
What are the double entries for Contra?
A
Dr Payables
Cr Receivables Account
3
Q
What are credit entries on the receivable account?
A
We owe the customer money
- The customer has overpaid
- Credit notes have been issued when the goods are already paid for
- Payment is received advanced of raising invoices
4
Q
What are dishonoured cheques/receipts?
A
Customer pays in a cheque but the bank funds are not sufficient
5
Q
What are the double entries for dishonoured cheques
A
Dr Receivable accounts
Cr Cash
6
Q
What are bank reconciliation?
A
Statement agreeing the balance on the bank statement to the balance in the cash at bank ledger account
7
Q
What is a bank credit?
A
- We have money
- The bank has a liability to us
- A debit (asset) in our books
- Acredit (liability) in the bank’s books
8
Q
What is is a bank debit?
A
- We owe money
- The bank has an asset as we owe the money back
- Credit (liability) in our books
- A debit (asset) in the bank’s books
