Question

BANK RECONCILIATION STATEMENT

The cash at bank ledgerof Starlet Limted shows a debit balance of £ 4,500 on 31st October 2017. Cheques for £ 2,000 from customers that were recently paid into the bank have not yet been processed.

Payments totalling £ 6,200 made by the business to its suppliers and others have not yet been presented to the bank statement for payment.

The bank has charged £ 700 in bank charges.

A cheque for £ 300 from a customer has been dishonoured.

The balance in the account according to the bank statement is £ 7,700

Required: Prepare a bank reconciliation statement for the month of October 2017

Answer 1

BANK RECONCILIATION STATEMENT

Particulars Amount (€). Amount (€).

Balance as per Cash Book ledger. 4500

Add:

1. Payments made to supplier not presented in. 6200. 6200

Bank for payment. (Note2)   

10700

Less:

1. Cheques received from customer paid in bank 2000

But not yet processed in bank.(Note 3)

2. Bank charges deducted from bank only not 700

Shown in cash book.(Note 4)

3. Cheques dishonoured from customers shown 300. (3000)

In bank but not in cash book. ( Note 4)   

Balance as per Bank statement. €7700.

Note:

In order to do Bank reconciliation statement we have to begin with a given book balance may it be cash book or bank statement and reach to other books balance with a reconciliation.

Now point to be noted is :

1.we have to make the balance equal in both the books by changing or giving effect in the books we have begin with.

Example : in above case we have begin with cash book ledger so we will make all the changes in cash book only so as to make equal as bank book.

2. In case of payment of cheque in bank we must have given effect of payment in cash book but it is not is cleared in bank hence we have deducted more in cash book but not in bank statement hence we will Add it.

3. In case of cheque deposited received by customer we have added in cash book but yet to be processed in bank hence we have increased the amount in cash book but not in bank statement so to make both equal we have deducted from cash book.

4. Regarding bank charges and dishonoured cheque the bank has deducted the amount but we have not deducted it so to make it equal we have deducted it in cash book.