Bank reconciliation statement Watch

queenfatso
Badges: 0
Rep:
?
#1
Report Thread starter 3 years ago
#1
Hey guys,

I have an exam coming up and it's about cash reconciliation statements but I'm struggling to know the order.

Can you give some examples of what goes on the debit and credit side of the cash book?

Do we start with "balance per bank statement" or "balance per cash book" for the reconciliation statement?

And then "add" on what? Give examples
Then "less" what? Give examples
Then what do we end with?

Any help would be appreciated.
0
reply
DJKL
Badges: 17
Rep:
?
#2
Report 3 years ago
#2
(Original post by queenfatso)
Hey guys,

I have an exam coming up and it's about cash reconciliation statements but I'm struggling to know the order.

Can you give some examples of what goes on the debit and credit side of the cash book?

Do we start with "balance per bank statement" or "balance per cash book" for the reconciliation statement?

And then "add" on what? Give examples
Then "less" what? Give examples
Then what do we end with?

Any help would be appreciated.
A bank rec can be laid out any way one chooses , and I cannot tell you what is expected in an exam. The sort of layout I would go for is say like this:

Cashbook balance £42,500


Balance per bank statement £46,200

Add: outstanding lodgements
(in cashbook not cleared bank stat)
1,200
600
1,700

Less; outstanding cheques:
(in cashbook not cleared bank stat)

1,200
4,000
2,000

Total £42,500

All the bank rec does is acts as a check between what has gone through the bank statement and what is through the cashbook, the trouble is that entries in the cashbook may be yet to feature on the bank statement, so the rec records the timing differences and acts as a control check on what you have in your cashbook. It helps detect errors/confirm all transactions entered.

Be careful with signs when working with overdrawn bank accounts, just remember to be consistent.
0
reply
queenfatso
Badges: 0
Rep:
?
#3
Report Thread starter 3 years ago
#3
(Original post by DJKL)
A bank rec can be laid out any way one chooses , and I cannot tell you what is expected in an exam. The sort of layout I would go for is say like this:

Cashbook balance £42,500


Balance per bank statement £46,200

Add: outstanding lodgements
(in cashbook not cleared bank stat)
1,200
600
1,700

Less; outstanding cheques:
(in cashbook not cleared bank stat)

1,200
4,000
2,000

Total £42,500

All the bank rec does is acts as a check between what has gone through the bank statement and what is through the cashbook, the trouble is that entries in the cashbook may be yet to feature on the bank statement, so the rec records the timing differences and acts as a control check on what you have in your cashbook. It helps detect errors/confirm all transactions entered.

Be careful with signs when working with overdrawn bank accounts, just remember to be consistent.
Thanks for your reply, you made it easier to understand

I want to also ask, is it true that if you titled "Bank reconciliation statement as AT [date]" then you would start with "Balance per BANK STATEMENT"
and if you titled "Bank reconciliation statement as ON [date]" then you would start with "Balance per CASH BOOK"?

And in what situation do you start with balance per cash book in the reconciliation and when with balance per bank statement?
0
reply
DJKL
Badges: 17
Rep:
?
#4
Report 3 years ago
#4
(Original post by queenfatso)
Thanks for your reply, you made it easier to understand

I want to also ask, is it true that if you titled "Bank reconciliation statement as AT [date]" then you would start with "Balance per BANK STATEMENT"
and if you titled "Bank reconciliation statement as ON [date]" then you would start with "Balance per CASH BOOK"?

And in what situation do you start with balance per cash book in the reconciliation and when with balance per bank statement?
I really cannot answer that, in real life there is no correct layout (albeit some CA firms may insist on a uniform layout)

I complete these as part of my work and have done for years, as I work at my own direction what I do is merely my preference, no idea about others.

I would tend to start with client records at top of page, either balance per cashbook or maybe if working from analysis sheets/incomplete records/ similar:

Opening balance at start of year
add lodgements in year
less payments in year
Closing balance at end of year


represented by:

Balance per bank statement
Add outstanding lodgements
Less outstanding cheques

The top part is the analysis of the clients books, as it is their books/accounts not those of the bank I am preparing they to me are more important so come first, but I have seen recs done side by side.

However I do suspect it is just habit, I have been preparing accounts virtually my entire working life and have founds that habits re working papers layout/presentation etc from my apprenticeship are those that have stuck. Given this was a long time ago my approach is no doubt out of fashion and dated.

Sorry I cannot be more exact.
0
reply
X

Quick Reply

Attached files
Write a reply...
Reply
new posts
Latest
My Feed

See more of what you like on
The Student Room

You can personalise what you see on TSR. Tell us a little about yourself to get started.

Personalise

University open days

  • University of Roehampton
    Department of Media, Culture and Language; School of Education; Business School Undergraduate
    Tue, 19 Feb '19
  • Edge Hill University
    Undergraduate and Postgraduate - Campus Tour Undergraduate
    Tue, 19 Feb '19
  • University of Kent
    Sciences, Social Sciences and Humanities Further education
    Tue, 19 Feb '19

Do you give blood?

Yes (66)
8.04%
I used to but I don't now (23)
2.8%
No, but I want to start (303)
36.91%
No, I am unable to (203)
24.73%
No, I chose not to (226)
27.53%

Watched Threads

View All
Latest
My Feed