CHAPTER 8 BANK RECONCILIATION TECHNICAL KNOWLEDGE Tounderstand the need for a bank reconciliation, ‘To know the reconciling items affecting the oash in bank per ledger. ‘To how the reconciling items affecting the cash in bank per bank statement. Tobe able to prepare a bank reconciliation, To be able to prepare the necessary adjusting entries to reconcile the cash in bank per ledger with theeash in bank ‘per bank statement, 224 Bank deposits ‘Thero aro three kinds of bank deposits, namely demand deposit, saving depostt and time dopost Demand deposit ‘The demand deposit is the current account or checking aosuint or commercial deposit where deposits are covered by deposit slips and where funds are withdrawablo on domand by drawing ‘hooks against the bank, A domand deposit is noninterest bearing. Swing deposit ‘ In a saving deposit, the depositor is given a passbook upon the initial deposit. The passbook is required whon making deposits ‘and withdrawals, Withdrayals are made anytime but the bank sometimes may require notice of withdrawal. A caving deposit is interest bearing. ‘Tine deposit ‘The time deposit is similar to saving deposit in the sense that itis interest hearing. A time deposit is evidenced, however, by a formal agreement ‘embovlied in an instrument ealled certificate of deposit. ‘Time deposit may be preterminated or withdrawn on demand or after a certain period of time agreed upon. 225