7 Cash Account

Let’s try another bank reconciliation, this time in a different format.

My turn:

You’re the accountant at A-Boss Group. A-Boss asks you to balance the Bank account at 30 November 20X9. He gives you the November bank statement, the General Ledger (from A-Boss Group’s accounting records), and last month’s bank reconciliation.

A-Boss Group
Regina Savings and Loan
Bank account #65-154864-331

Date	Description	Increase	Decrease	Account Balance
Opening balance				24,560
1 Nov	Deposit	6,950		31,510
5 Nov	E-transfer (K Nees Ltd)		1,250	30,260
8 Nov	Cheque #50		10,600	19,660
12 Nov	Deposit	18,200		37,860
	Cheque #55		2,300	35,560
20 Nov	E-transfer (K Nuckle Co)	500		36,060
25 Nov	Deposit	32,400		68,460
	Cheque #60		10,000	58,460
28 Nov	NSF Cheque (El Bow Inc)		6,800	51,660
	NSF Fee		30	51,630
	E-transfer (W Rist Ltd)	1,700		53,330
29 Nov	Transfer to VISA		15,000	38,330
30 Nov	Monthly Bank fees		45	38,285

A-Boss Group
General Ledger
(Cash: Regina Savings and Loan Bank)
For the Month Ended 30 November 20X9

Date	Description	Split	Amount	Balance
Beginning Balance					11,410
5 Nov		E-transfer	A/P	(1,250)	10,160
11 Nov		Deposit	A/R	18,200	28,360
15 Nov	#60	Cheque	Salaries	(10,000)	18,360
	#61	Cheque	A/P	(21,000)	(2,640)
23 Nov	#62	Cheque	Office Exp	(1,350)	(3,990)
24 Nov		Deposit	A/R	32,400	28,410
28 Nov	#63	Cheque	A/P	(5,200)	23,210
	#64	Cheque	A/P	(2,300)	20,910
29 Nov		Transfer to VISA	VISA — owner	(5,000)	15,910
30 Nov		Deposit	A/R	17,900	33,810

A-Boss Group
Bank Reconciliation
(Cash: Regina Savings and Loan Bank)
31 October 20X9

Balance per Bank		24,560
(-) Deposit in Transit		6,950
(-) Outstanding Cheques:
#50	(10,600)
#55	(2,300)
#56	(7,200)	(20,100)
Adjusted Balance per Bank		11,410

Balance per Books		10,050
(+) E-transfer (H Ands Ltd)		1,650
(-) Bank Fees		(40)
(-) Correction of Error		(250)
Adjusted Balance per Books		11,410

Required:

Now that we have all the documents, let’s reconcile the bank account one step at a time. A template is provided for your final bank reconciliation.

1. See if outstanding items from last month’s bank reconciliation cleared the bank this month. Cross off all matching items on both the bank rec and the November bank statement: the deposit in transit of $6,950 cleared on 1 Nov; cheque #50 cleared on 8 Nov; and cheque #55 cleared on 12 Nov. Go ahead and do this now. Good work! Let’s move on to step 2.
2. Working from the top of the bank statement, find each item on the General Ledger. If they match, write a line through the item on both the Bank Statement and General Ledger. If a matching item does not exist, skip it and move on. Do this now. Good work!
3. Write the heading for your November Bank Reconciliation and the beginning balances. Excellent!
4. Identify items on the General Ledger and the October Bank Reconciliation (Balance per bank side) that are not crossed off. These will be your outstanding items on the balance per bank side. Write them in. Note that errors in amount, like the VISA transfer, will be corrected on our books, so just skip over this item. We’ll deal with errors in the next step. Alright – let’s keep going!
5. Identify items on the Bank Statement that are not crossed off. These will be your outstanding items on the balance per books side. Write them in. Note that the VISA error needs to be adjusted by the difference between book and bank items, in this case you’ll subtract 10,000. Errors require special care.

Here’s a template for the Bank Reconciliation that you can fill in. When you are finished working steps (1) to (5) on your own, check your work.

A-Boss Group
Bank Reconciliation
(Cash: Regina Savings and Loan Bank)
31 October 20X9

A-Boss Group
Bank Reconciliation
(Cash: Regina Savings and Loan Bank)
30 Novemeber 20X9

At this point, let’s create journal entries for the balance per books side. Take a look…

Ok; now it’s your turn. Complete the Bank Reconciliation. Give it your best try!!

Does it balance? Well done!! Now create some journal entries for items on the balance per books side.