Reconciliation

Question 1

what are the three types of items? (3)

Answer 1

• appear in bank statement and records
  – items agree, nothign further needed
• appear in bank statement, not records
  – adjusting items, must update records
• appear in records, not bank statement
  – timing differences

Question 2

what are the reasons for item differences? (2,2)

Answer 2

• timing (reconciliation) differences
  – difference in time between when business records info, and bank records info
• adjusting differences
  – transactions that business owner not aware of until receiving bank statement

Question 3

how to prepare a bank reconciliation? (4)

Answer 3

• tick off items that appear to be same in general ledger and on bank statement
• identify all unreconciled items (unticked boxes)
• update bank account in general ledger for any adjusting differences or errors
• prepare bank reconciliation statement