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  • Business Accounting (Part 5) PDF

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    This document discusses reconciling a cash book to a bank statement. It identifies unrecorded items like interest and fees in the cash book. It also notes timing differences from outstanding checks and deposits. The reconciliation process involves revising the cash book balance by adjusting for unrecorded items. It then reconciles the revised cash book balance to the bank statement balance by accounting for outstanding checks and deposits as timing differences.

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    This document discusses reconciling a cash book to a bank statement. It identifies unrecorded items like interest and fees in the cash book. It also notes timing differences from outstanding checks and deposits. The reconciliation process involves revising the cash book balance by adjusting for unrecorded items. It then reconciles the revised cash book balance to the bank statement balance by accounting for outstanding checks and deposits as timing differences.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    13 views3 pages

    Business Accounting (Part 5) PDF

    Uploaded by

    Ali
    This document discusses reconciling a cash book to a bank statement. It identifies unrecorded items like interest and fees in the cash book. It also notes timing differences from outstanding checks and deposits. The reconciliation process involves revising the cash book balance by adjusting for unrecorded items. It then reconciles the revised cash book balance to the bank statement balance by accounting for outstanding checks and deposits as timing differences.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    of 3

    Accounting for Cash &

    Bank Transactions

    Business Accounting
    Differences between bank statement & cash book
    Unrecorded items
    1. Interest (on overdraft)
    2. bank charges (for services rendered)
    3. dishonored cheques
    4. Direct debits

    Timing differences

    1. Outstanding/unpresented cheques (cheques sent to suppliers but not yet cleared by the bank)
    2. Outstanding/uncleared lodgements (cheques received by the business but not yet cleared by the bank)

    Business Accounting
    The Bank Reconcilliation
    Step 1: Revised Cashbook (through double entries)
    PKR
    Balance as per cash book (original) XXX

    Less: interest (XX)


    bank charges (XX)
    dishonored cheques (XX)

    Balance as per cash book (revised) XXX

    Step 2: Bank Reconciliation (timing difference hence no entries required)

    PKR
    Balance per cash book (revised) XXX

    Add: Outstanding/unpresented cheques XX


    Less: Outstanding/uncleared lodgements (XX)

    Balance per bank statement XXX

    Business Accounting

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