BANK RECONCILIATION Note: inclusive of the cash on hand (kahit ‘di
Cash in Bank mo pa dini-deposit, assume na ide-deposit
- per book = per bank mo rin)
- ≠ if merong reconciling items Outstanding Checks – check recorded
Ex: Unrecorded items by the depositor but not yet recorded by
Errors the bank; item of deduction in the bal.
Cash in the General Ledger per bank
Beginning balance of cash - Certified Checks (excluded)
Book Receipts (inflows) – book debits Errors – Bank
Book Disbursement (outflow) – book cr. - Maybe an item of addition or an
Ending balance of cash item of deduction
Cash in Bank Statement
Beg. Bal. Three Forms of Bank Reconciliation
Bank Receipts – bank credits 1. Adjusted Balance Method
Bank disbursement – bank dr. 2. Book to Bank Balance Method
End bal. 3. Bank to Book Balance Method
Journal Entries:
Depositor
Cash in Bank xx
Cash on Hand xx
Bank
Cash xx
Liability to the depositor xx
Reconciling Items
Book Reconciling Items – items that not yet
recorded by the depositors and errors committed
by the depositor
Debit Memo – already debited by the
bank but not yet recorded by depositor;
deduction in the bal. per book
- NSF checks – must not be
redeposited by the same month
- Defective checks
- Charges
- Reduction/Payment of Loan
Credit Memo – these are the items
credited by the bank but still not
recorded by the depositor; addition in
the bal. per book
- Note Receivable Collected by
the bank
- Proceeds of bank loan
- Mature time deposits transferred
by the bank to the depositor
Errors – Depositor
- Maybe an item of addition or an
item of deduction
Bank Reconciling Items - items that not yet
recorded by the bank but already recorded by
the depositor and these are also the errors by
the bank
Deposits in Transit – collection already
recorded by the depositor but not yet
recorded by the bank; addition in the
bal. per bank
