FUNDAMENTALS OF

SENIOR
ACCOUNTANCY, BUSINESS, HIGH
SCHOOL
AND MANAGEMENT 2 (FABM2)
Self-
Effects of the Identified Learning
Module
Reconciling Items Part II 8

Quarter 2
Fundamentals of Accountancy, Business, and Management 2
Quarter 2 – Self-Learning Module 8: Effects of the Identified Reconciling Items
Part II
First Edition, 2020

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Published by the Department of Education - Schools Division of Pasig City

Development Team of the Self-Learning Module

Writer: Vida M. Orajay
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of Pasig City
FABM2
SENIOR
HIGH
SCHOOL

Self –
Learning
Module
8

Quarter 2

Effects of the Identified

Reconciling Items Part II
Introductory Message

For the facilitator:

Welcome to the Fundamentals of Accountancy, Business, and Management2

for Grade 12 Self-Learning Module on Effects of the Identified Reconciling Items Part
II.

This Self-Learning Module was collaboratively designed, developed and

reviewed by educators from the Schools Division Office of Pasig City headed by its
Officer-in-Charge Schools Division Superintendent, Ma. Evalou Concepcion A.
Agustin, in partnership with the City Government of Pasig through its mayor,
Honorable Victor Ma. Regis N. Sotto. The writers utilized the standards set by the K
to 12 Curriculum using the Most Essential Learning Competencies (MELC) in
developing this instructional resource.

This learning material hopes to engage the learners in guided and independent
learning activities at their own pace and time. Further, this also aims to help learners
acquire the needed 21st-century skills especially the 5 C’s, namely: Communication,
Collaboration, Creativity, Critical Thinking, and Character while taking into
consideration their needs and circumstances.

In addition to the material in the main text, you will also see this box in the
body of the module:

Notes to the Teacher

This contains helpful tips or strategies that
will help you in guiding the learners.

As a facilitator, you are expected to orient the learners on how to use this
module. You also need to keep track of the learners' progress while allowing them to
manage their learning. Moreover, you are expected to encourage and assist the
learners as they do the tasks included in the module.
For the learner:

Welcome to the Fundamentals of Accountancy, Business, and Management 2

Self-Learning Module on Effects of the Identified Reconciling Items Part II.

This module was designed to provide you with fun and meaningful
opportunities for guided and independent learning at your own pace and time. You
will be enabled to process the contents of the learning material while being an active
learner.

This module has the following parts and corresponding icons:

Expectations – These point to the set of knowledge and skills

that you will learn after completing the module.

Pretest - This measures your prior knowledge about the lesson

at hand.

Recap - This part of the module provides a review of concepts

and skills that you already know about a previous lesson.

Lesson - This section discusses the topic in the module.

Activities – These are sets of activities that you need to

perform.

Wrap Up - This section summarizes the concepts and

application of the lesson.

Valuing - This part integrates a desirable moral value in the

lesson.

Posttest - This measures how much you have learned from the
entire module.
 EXPECTATIONS

After going through this self-learning module, you are expected to:
1. analyze the effects of the identified reconciling items;
2. determine the reconciling items needed in the preparation of Balance per Bank
Statement; and
3. illustrate the content of Balance per Bank Statement.

PRETEST

Identification. Directions: Identify the following by writing a / (check) inside the

box that corresponds to your answers.
Set A Contains the Reconciling Items/Titles used in preparing the Bank
Reconciliation Statement (BRS) and their effects in adjustments.

Reconciling Items Effects to adjustments

Deductions from Balance per Bank Statement
1. Deposits in Transit
Additions from Balance per Bank Statement
Deductions from Bank Statement. No effect in
2. Bank Charges Balance Per Bank
Additions from Bank Statement. No effect in
Balance per Bank Statement
Deductions from Balance per Bank Statement
3. Outstanding Checks Additions from Balance per Bank Statement

Set B Is an illustration of the Bank Reconciliation Statement (BRS). Arrange the

parts based on their arrangement in the preparation of BRS. Use numbers 1, 2, and
3.

___Adjusted/Corrected Balance per Bank

___Adjustments:
___Unadjusted Balance per Bank Statement (end of the month)
 RECAP

Directions: Read and identify the given statements. Write after each sentence the
reconciling items used in preparing the Balance per Book of a company.

1. A document informing the depositor of debit adjustments made to their bank

account.
2. A fee deducted from the bank statement for processing the checking account
activity.
3. The collections were made by the bank and credited to the company’s account.
4. This check is also known as a bounced check.
5. It occurs when a company requested its bank to handle the recording of its
checks.

LESSON

What you learned in Module No. 7 is interconnected to this module while

Module 6 introduced the items or terms and methods use in preparing the bank
reconciliation statement. Remember that there are three methods use in preparing
the bank reconciliation statements namely, the Adjusted Method, Book to Bank
Method, and the Bank to Book Method.

This module, Module No. 8, focuses on the items needed in the preparation of
Balance per Bank Statement and their effects.

Deposits in Transit (DIT)/Undeposited Collections

✓ amounts already received and recorded by the company, but not yet recorded
by the bank;
✓ are on the company’s books, but they are not on the bank statement.

Illustrative Example No. 1:

A hardware store received a check from customers amounting to P25,000.00

on August 30 and was recorded in the company’s books and deposited to the bank
on the 1st day of September.

P25,000.00 is DIT because it was received but not yet deposited.

 What are the effects of the transaction in preparing the Bank Reconciliation
Statement?

Remember that deposits in transit are not yet on the bank statement. Therefore,
the amount collected should be listed on the bank reconciliation as an increase to
the balance per bank to report the true amount of cash. All outstanding deposits
are a deduction from the balance per cash book under the bank reconciliation
statement.

Outstanding checks
✓ checks that have been written and recorded in the company’s Cash account
but have not yet cleared the bank account or presented to the bank by the
payee;
✓ checks were written during the last few days of the month plus a few older
checks.
✓ are adjustments to the bank balance

Illustrative Example:

A coffee shop wrote several checks amounting to P15,000.00. As of the end

of September, P8,100.00 written checks are not yet cleared by the bank, and the
P2,500.00 checks written are also not yet cleared the bank.

P8,100.00 plus P2,500.00 = P10,600.00 are the outstanding checks.

What are the effects of the transactions in preparing the Bank Reconciliation
Statement?

Because the checks are already written in the cash account of the company, there
is no need for an adjustment. But outstanding checks are deductions from the
balance per bank statement.

If the outstanding check of the previous month did not clear the bank account in
the current month, the check will remain as outstanding checks and should be
listed. However, if the outstanding checks of the previous month are already
cleared by the bank which means the bank paid the checks and must be deducted
on the statement and will be removed from the outstanding checks.

Bank errors
✓ are mistakes made by the bank which includes:
a. recording of incorrect amount
b. entering an amount that does not belong on a company’s bank
statement
c. omitting an amount from a company’s bank statement
d. in the case of bank errors, the company should notify the bank of
its errors.

Remember: If the errors are on the part of the bank, no charges are being collected
to the company.
 The illustration shows how the Balance per Bank Statement is being presented.

Unadjusted Balance per Bank Statement (end of the month)

Adjustments:
Add: Deposits in Transit
Deduct: Outstanding Checks
Adjusted/Corrected Balance per Bank

Illustration No. 1

ACTIVITIES

Activity No. 1 Determine the Reconciling Item applicable to the given transaction
and its effects in the preparation of Balance as per Bank Statement.

Transactions Reconciling Term/Item Effects to Adjustments

A company wrote checks
but not yet cleared by the
bank.
Collected check at the
end of the month but
deposited on the 1st day
of the following month.
Bank charges were
collected from the
depositor for processing
the checking activities.

Activity No. 2 Illustrate the parts of the Bank Reconciliation Statement per Bank.
 WRAP–UP

Complete the sentence.

The things I learned from this module are_____________________________________

______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________

VALUING

Relate the knowledge you gain from this module to the

and

Sun Moon
 POSTTEST

Identification. Directions: Identify the following by writing a / (check) inside the

box that corresponds to your answers.
Set A Contains the Reconciling Items/Titles used in preparing the Bank
Reconciliation Statement (BRS) and their effects in adjustments.

Reconciling Items Effects to adjustments

Deductions from Balance per Bank Statement
1. Deposits in Transit
Additions from Balance per Bank Statement
Deductions from Balance per Bank Statement
2. Bank Charges
Additions from Balance per Bank Statement

Deductions from Balance per Bank Statement

3. Outstanding Checks Additions from Balance per Bank Statement

Set B Arrange the parts according to their arrangement in the preparation of BRS.
Use numbers 1, 2, and 3.

___ Adjustments
___ Adjusted/Corrected Balance per Bank
___ Balance per Bank Statement (end of the month)
 KEY TO CORRECTION

5. Check Printing Charges

4. No Sufficient Fund/NSF
3. Credit Memorandum/Credit Memo
2. Bank Service Charges
1. Debit Memorandum/Debit Memo
Recap

2,3,1 3,21
Set B Set B
Bank Statement Bank Statement
3. Deductions from Balance per 3. Deductions from Balance per
Balance per Bank Statement Balance per Bank Statement
Statement. No effect in the Statement. No effect in the
2. Deductions from the Bank 2. Deductions from the Bank
Bank Statement Bank Statement
1. Additions from Balance per 1. Additions from Balance per
Set A Set A
Posttest Pretest

REFERENCES
BOOKS
Beticon, Josefina L, James Christopher D. Domingo, Fermin Antonio, D.
Yabut. 2016. Fundamentals of Accountancy, Business, and
Management 2. Quezon City: Vibal Group Inc.

Harina, Ricardo M. 2007. College Accounting 1, Revised Ed. Mandaluyong

City: National Book Store.

Monfero, Raymond Patrick P, Carlsberg S. Andres, Dani Rose C. Salazar, and

Christopher B. Honoraria.2016. Fundamentals of Accountancy,
Business, and Management 2. Quezon City: Commission on Higher
Education.
WEB
https://help.accounting.sage.com/en-ie/accounting/banking/extra-bank-
reconcile-discrepancies.html
https://accounting-simplified.com/financial/bank-reconciliation/deposit-in-
transit.html
https://www.accountingcoach.com/blog/bank-reconciliation-outstanding-
checks