SESSION 14 BANK RECONCILIATION STATEMENTS

Prepare a bank reconciliation statement as at 31 July.

Cash book

Bank reconciliation statement as at 31 July

$
Balance per bank statement
Less: Unpresented cheque
Add: Uncleared lodgement
Balance per cash book

EXAMPLE 4
The following information has been extracted from the records of N. Patel:
Bank account
$
1 Dec

Balance b/d

2 Dec

Able

Chq. no.

16,491

1 Dec

Alexander

782

857

962

6 Dec

Burgess

783

221

Baker

1,103

14 Dec

Barry

784

511

10 Dec

Charlie

2,312

17 Dec

Cook

785

97

14 Dec

Delta

419

24 Dec

Hay

786

343

21 Dec

Echo

327

29 Dec

Rent

787

260

23 Dec

Cash sales

529

30 Dec

Fred

119
31 Dec

Balance c/d

22,262

KAPLAN PUBLISHING

19,973
22,262

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CAT PAPER 3 (INT) MAINTAINING FINANCIAL RECORDS (MFR)

High Street Bank

Bank Statement N. Patel
Date

Details

Withdrawals

Deposits

Balance

1 December

Balance b/f

16,491

5 December

782

5 December

Bank charges

6 December

Deposit

10 December

Standing order (rates)

137

17,515

11 December

783

212

17,303

13 December

Deposit

17 December

784

17 December

Deposit

419

19,523

23 December

Deposit

327

19,850

24 December

Deposit

528

20,378

28 December

786

343

20,035

30 December

310923

297

19,738

31 December

Balance c/f

857
47

15,587
2,065

2,312
511

17,652

19,615
19,104

19,738

Required:
(a)

Update the cash book for December.

(b)

Prepare a bank reconciliation statement at 31 December.

(c)

Why do we prepare a monthly reconciliation statement?

SESSION SUMMARY
These are the steps to completing a bank reconciliation statement:

Tick off the common entries (tick from the cash book to the bank statement).

Ensure that the opening balances can be reconciled:

If the opening balances do not agree, identify the outstanding items from the previous
month. Establish the first cheque number of the current month all previous cheque
numbers are outstanding cheques. If there is still a difference, look at the first lodgements
of the month. Tick off these outstanding items in the bank statement.

Update the cash book with unticked items on the bank statement.

Enter outstanding items in the reconciliation statement, i.e. unticked items in the cash
book.

Correct any errors and complete the reconciliation statement.

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KAPLAN PUBLISHING