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Bank Reconciliation Statements (With Answers) : Advanced Level
Bank Reconciliation Statements (With Answers) : Advanced Level
B.
C.
Advanced Level
Method 1
Bank Reconciliation Statement as at 31 January 19X1
$
Balance per cash book
Add: Correction of error on rent paid*
Unpresented cheques (outstanding)
Less: Standing order (subscription paid)*
Uncredited deposits (outstanding)
Balance per Bank statement
$
570
9
1 555
60
2 520
1 564
2 134
2 580
O/D (446)
570
9
(60)
519
Method 2
Bank Reconciliation Statement as at 31 January 19X1
Balance per cash book
Add: Correction of error on rent paid
Less: Charitable subscription paid so
Corrected cash book balance
$
570
9
579
60
519
O/D (446)
2 520
2 074
1 555
519
60
2
Advanced Level
Cr. Rent
Cr. Cash
9
51
Exercise One
Kay Rogans Cash Book at 30th November 1982 showed an overdrawn position of 3,630
which did not match with her bank statement. Detailed examination of the two records revealed the
following:
(a) The debit side of the cash book had been undercast by 300.
(b) A cheque for 1,560 in favour of Z Suppliers Ltd., had been omitted by the bank from its
statement, the cheque having been debited to another customers account.
(c) A lodgement of 1080 on 30th November had not been credited by the bank.
(d) Interest amounting to 228 had been debited by the bank but not entered in the cash book.
Required:
i.
ii.
Reconcile the balance of the cash book and bank statement to the corrected bank
balance. (Method 2)
Reconcile the cash book balance to the balance of the bank. (Method 1)
i)
Bank Reconciliation Statement as at 30.11.82
$
(3630)
300
(3330)
Less: Interest not entered in cash book
228
3558
$
$
(3078)
1080
3
Advanced Level
(1998)
Less: Cheque omitted (Bank error)
1560
(3558)
ii)
Bank Reconciliation Statement as at 30.11.82
$
(3630)
300
1560
1860
(1770)
228
1080
1788
__
4038
Exercise Two
Hay has received his bank pass sheets for the year to 30 September 1993. At the date, his
balance at the bank amounted to 14,130 whereas his own cash book showed a balance of 20,000.
His accountant investigated the matter, and discovered the following discrepancies:
(a) Hay had brought down his opening cash book balance of 6,585 as a debit balance instead
of as a credit balance.
(b) Hay had entered a payment of 560 in his cash book as 650.
(c) Cheques drawn by Hay in July 1993 had not been presented to the bank.
(d) One of Hays customers had agreed to settle their debts 450 by direct debit though
nothing was entered in the cash books yet. Unfortunately, the bank had credited the direct
debit to another customers account.
Required:
i.
ii.
i)
Cash Book
4
Advanced Level
Balance b/d
(b)
20,000 (a)
90
Suspense-error of carrying
13,170
down (6,585 x 2)
(650-560)
(d)
450
Balance c/d
7,370
20,540
ii)
20,540
450
14,580
(b.f)
7,210
7,370
Exercise Three
Leslie, a sole trader, received a bank statement for the month of May as follows:
May
Dr.
Cr.
Balance
1
Opening balance
85
3
123456
150
65 O/D
9
123450
42
107 O/D
14 Sundry credit
210
103
18 Interest
24
79
20 Sundry credit
350
429
22 123457
220
209
23 123448
100
109
24 Standing order rent
10
99
25 Sundry credit
531
630
26 Credit transfer Mills
25
655
28 423460
100
555
30 123459
405
150
31 Closing balance
150
For the corresponding period, Leslie's own records contained the following bank account:
Bank
May
14
$ May
210 1
Balance b/d
$
57
5
Advanced Level
20
25
25
31
31
Cash Sales
Cheque from F Jones
Cheque from R Black
Cheque from W Wayne
Balance c/d
350 3
410 22
121 23
196 30
9 31
1 296
Electricity
Wages
Purchases
Rent
Purchases
123456
123457
123458
123459
123460
150
222
415
405
47
1 296
Required:
Prepare the bank reconciliation statement as at 31 May 1993 from the cash book and the bank
statement to the corrected bank balance.
Workings: (reconciliation of beginning balances of cash book and bank statement)
The beginning balance of the bank statement
Less: Unpresented cheques last month (42+100)
The beginning balance of the cash book
$ 85
142
(57) O/D
$
(9) O/D
25
2
27
18
Less:
24
Standing order
10
(16) O/D
34
150
Uncredited deposit
196
100
296
446
Less:
415
- 123460
47
462
(16) O/D
6
Advanced Level
Advanced Level
$ June
190 1
100 9
450 19
110 29
301 30
1 151
Balance b/d
Rates
Purchases
Wages
Balance c/d
123462
123463
123464
$
16
230
505
120
280
1 151
The corresponding bank statement for the month of June 1993 was:
June
1
1
1
3
9
25
29
30
Dr.
Opening balance
Sundry credit
Sundry credit
Adjustment
123462
Sundry credit
123464
Closing balance
Cr.
196
190
100
230
550
120
Balance
150
346
536
636
406
956
836
836
Additional information:
It was found that the details for the cheques received on 30th June 1993 were:
Drawer of the cheque
Date on the cheque
Amount
X York
15th December 1992
$110
Z Rock
15th July 1993
301
You are required to:
a) Update and correct the cash book on 30th June 1993.
b) Draw up a bank reconciliation statement at 30th June 1993.
c) Are there any irregularities to be reported after the reconciliation?
d) What would we do if a cheque drawn by us remained unpresented for over six months?
Advanced Level
(a)
Cash Book (Bank column)
Balance b/d
280 X. York
(stale cheque)
110
Balance c/d
(postdated cheque)
301
411
411
b)
Leslie
Bank Reconciliation Statement as at 30 June 1993
$
Balance as per bank statement
Less:
Unpresented cheques
- 123458
415
- 123460
47
- 123463
505
$
863
967
(131) O/D
462
(16) O/D
c) i) Deposits of money received on 15 / 16 of June only appeared on the bank statement only on
25 of June. The unreasonable delay of 10 days is not acceptable.
ii) The cheque no. 123461 is missing.
d)
Exercise Five
Kay Rogans Cash Book at 30th November 1982 showed an overdrawn position of 3,630
although her bank statement showed only 2,118 overdrawn. Detailed examination of the two
9
Advanced Level
$ 1982
Suspense - undercast
Dividend received
Balance c/d
300
Balance b/d
90
Telephone
3732
3630
54
210
Interest
228
4122
4122
2.
Bank Reconciliation Statement as at 30 September 1993
$
$
10
Advanced Level
(2,118)
126
Uncredited deposit
1,080
1,206
(912)
1,560
1,260
2,820
(3,732)
Exercise Six
Hay has received his bank pass sheets for the year to 31st October 1983. At the date, his
balance at the bank amounted to 14,130 whereas his own cash book showed a balance of 47,330.
His accountant investigated the matter, and discovered the following discrepancies:
(a)
(b)
(c)
(d)
$
47,330
11
Advanced Level
530
90
620
47,950
1,240
Bank charges
60
Dishonoured cheque
Error in balance b/d (6,585 x 2)
300
13,170
880
15,650
32,300
(ii)
Bank Reconciliation statement as at 31.10.83
$
Balance per Bank Statement
Add: Uncredited deposit
Direct debits posted to another customer
$
14,130
1,970
16,650
18,620
32,750
450
32,300
12
Advanced Level
Exercise Seven
The bank account for the month of September 1983 for the firm of Rivers and Co. was as follows:
Bank Account
Receipts
Payments
Sept
1
1
1
13
20
Sept.
Balance b/d
T. Hames
Dove Enterprises
Isis PLC
Colne Electronics
271.94 3
53.40 4
62.85 8
1793.48 9
2404.37 13
20
24
26
26
27
28
30
Derwent Ltd.
Severn Bros.
Clyde and Co.
Ribble Merchants
Swale Associates
Don Engineering
Humber Water Authority
Arun Decorators
Tyne Borough
Council
Salaries transfers
Wye and sons Ltd.
Balance c/d
Cheque
no.
052316
052317
052318
052319
052320
052321
Direct
Debit
052322
Standing
Order
-052323
4586.04
Oct
Balance b/d
1
25.08
31.72
121.86
1374.29
10.35
642.13
32.00
90.44
123.57
940.60
4.30
1189.70
4586.04
1189.70
In early October the firms bank sent a statement for the month of September 1983, as shown below.
Statement of account with Mersey Bank Plc
Name: Rivers and Co. Current Account Date Issued: 1st October 1983
Sept.
1
2
5
8
12
13
13
15
16
Description
BCE
052315
052314
052316
DD (Medway Insurance)
CR
052318
052319
052317
Debit
Credit
85.16
100.34
25.08
26.26
1793.48
121.86
1374.29
31.72
Balance
592.45
507.29
406.95
381.87
355.61
2146.09
2027.23
652.94
621.22
13
Advanced Level
20
CR
2404.37
3025.59
22 DD (Humber Water Authority)
32.00
2993.59
23
052320
10.35
2983.24
26
SO
123.57
2859.67
28
TRFR
940.60
1919.07
20
INT (Loan Account)
11.19
1907.88
30
Bank charges
7.37
1900.51
30
052321
642.13
1258.38
30
BCE
1258.38
Abbreviations:
BCE = Balance
SO = Standing Order
CR = Credit TRFR = Transfer.
INT = Interest.
DD = Direct debit (to Current Account).
Required:
Prepare the firms Bank Reconciliation Statement as at 30th September 1983.
(You should make reasonable assumptions in order to explain some items in the question. The
answers may vary according to your assumptions.)
Bank Reconciliation statement as at 30.9.1983
1,189.7
26.26
11.19
7.37
116.25
161.07
1,028.63
1,258.38
90.44
4.30
135.01
229.75
1,028.63
592.45
100.34
85.16
185.5
406.95
271.94
135.01
14
Advanced Level
15
Advanced Level
Exercise Eight
From the information given below relating to PWW Limited you are required to:
(a) Make such additional entries in the cash at bank account of PWW Limited as you
consider necessary to show the correct balance at 31st October 1982.
(b) Prepare a statement reconciling the correct balance in the cash at bank account as shown
in (a) above with balance at 31st October 1982 that is shown on the bank statement from Z
Bank Limited.
Cash at bank account in the ledger of PWW Limited
October
1
Balance b/f
8
Q Manufacturing
8
R Cement
11 S Limited
11 T & sons
11 U & Co
15 V Limited
15 W Electrical
22 X and Associates
26 Y Limited
26 Z Limited
29 ABC Limited
29 DEE Corporation
29 GHI Limited
31 Balance c/f
$
274
3443
1146
638
512
4174
1426
887
1202
2875
982
1003
722
2461
14
21759
October
1
1
8
8
15
15
22
22
22
22
22
22
22
22
25
26
26
26
28
29
29
29
Wages
Petty Cash
Wages
Petty Cash
Wages
Petty Cash
A & Sons
B Limited
C & Company
D&E
F Limited
G Associates
Wages
Petty Cash
H & Partner
J Sons & Co. Ltd
K & Co
L, M & N
O Limited
Wages
Petty Cash
P & Sons
$
3146
55
3106
39
3029
78
929
134
77
263
1782
230
3217
91
26
868
107
666
112
3191
52
561
21759
16
Advanced Level
Z Bank Limited
Statement of Account with PWW Limited
October
1
1
1
1
2
2
6
8
8
8
11
15
15
15
22
22
22
25
25
26
26
26
27
27
29
29
29
29
29
29
31
Payment
937407
937406
937372
937384
937379
937391
Sundry credit
937408
937409
Sundry credit
Sundry credit
937411
937410
Sundry credit
937418
937419
937416
937413
937412
Sundry credit
937417
937415
937414
Sundry credit
937426
937425
937420
Dividends on investments
937423
Charges
Receipts
55
3146
421
73
155
212
Balance
1135
O/D
2487
O/D
O/D
2715
2927
O/D
1483
3841
4589
3106
39
5324
2313
78
3029
3047
1202
3217
91
1782
134
929
941
O/D
975
3857
230
263
77
1723
1383
4186
52
3191
26
2728
666
936
4362
3426
17
Advanced Level
Cash Book
1982
31/10
$ 1982
Dividends on investment
2,728 31/10
$
Balance b/d
14
Charges
936
Balance c/d
1,778
2,728
2,728
$
3,426
868
K & Co
107
O Ltd
112
P & Sons
561
1,648
1,778
1,135
421
~ 937384
73
~ 937379
155
~ 937391
212
861
274
Exercise Nine
On 3 February 1983, Mr. J. Sheffield received the following monthly current account bank
statement for January 1983 from his bank.
Mr. Sheffield liked to keep a full record of all his personal transactions including cash
purchases by completing a note book of all monies received and paid. The following is an extract
of his note book for the month of January 1983. The balance on 1 st January 1983 included his
personal cash which amounted to 26.30 (twenty six pounds thirty pence) as well as his current
bank account balance. The cash drawn from the bank for own use was used immediately for
personal expenditure.
18
Advanced Level
Particulars
Payments
Receipts
Balance
Cheque 5923
Cash
Standing Order
Cheque 21804
K. Roberts cheque receipt
cheque 21805
Dishonoured cheque
Cheque 21807
Standing Order
Cash
Salary
Charges
Transfer
Salary Mrs. Sheffield
Interest
Balance
26.00
55.00
52.00
36.18
56.26
72.40
56.26
46.27
26.00
100.00
563.00
16.82
250.00
235.00
0.62
246.00
220.00
165.00
113.00
76.82
133.08
60.68
4.42
O/D 41.85
O/D 67.85
32.15
595.15
578.33
328.33
563.33
562.71
Particulars
Balance
55.00
36.18
72.40
56.26
100.00
52.00
131.62
55.00
46.27
62.34
26.00
100.00
64.80
272.30
217.30
181.12
108.72
164.98
64.98
12.98
144.60
89.60
43.33
O/D 19.01
O/D 45.01
-19.79
19
Advanced Level
26
28
28
31
563.00
250.00
235.00
582.79
332.79
-332.79
20
Advanced Level
Required:
(a) A bank reconciliation statement for the month of January 1983.
(b) Suggest to Mr. J. Sheffield how he can make the work of reconciliation easier. What items
would you query with the bank, if any and why?
(a)
Bank Reconciliation statement as at 31.1.83
332.79
55.00
100.00
155.00
487.79
26.30
131.62
157.92
329.87
Dishonoured cheque
56.26
Charges
16.82
Interest
0.62
73.70
256.17
562.71
64.80
26.00
90.80
653.51
100.00
62.34
235.00
397.34
256.17