LOGIC/CONCEPT

1.) THE BANK WHEN CORRECTING ERRORS WILL ADD THE OPPOSITE ONCE CORRECTED

IF A RECEIPT WAS OVERSTATED, THE BANK/BOOK WILL INSTEAD ADD THE DISBURSTMENT and VISA-VIS

AN INTERNAL CONTROL OF BANKS IS THAT IT DOES NOT ALLOW DEDUCTIONS FROM THE RECEIPT OR DISBURSTMENT
RATIONAL: IT HELPS THE BANK DETECT ERRORS IN THE SYSTEM THIS WILL PREVENT MISTAKES FROM BEING DELETED AND AL

Definition of Scenarios
1.) Credit Memo Last Month
The Receipts were added by the bank, but was not informed to the Client, and that it has reflected in their Receipts for the ne
 BOOK
SCENARIO PRIOR RECEIPTS PRIOR DISBURSTMENT

CREDIT MEMO LAST MONTH

WHAT ACTUALLY HAPPENED N/A
WHAT SHOULD BE XX
ADJUSTMENT XX

CREDIT MEMO CURRENT MONTH

WHAT ACTUALLY HAPPENED
WHAT SHOULD BE
ADJUSTMENT

DEBIT MEMO LAST MONTH

WHAT ACTUALLY HAPPENED N/A
WHAT SHOULD BE XX
ADJUSTMENT XX

DEBIT MEMO CURRENT MONTH

WHAT ACTUALLY HAPPENED
WHAT SHOULD BE
ADJUSTMENT
 BOOK
PRIOR MONTH BALANCE RECEIPT DISBURSTMENT CURRENT MONTH BALANCE
+ + - =

N/A XX XX
XX XX
XX (XX)

N/A N/A
XX XX
XX XX

N/A XX (XX)
(XX) (XX)
(XX) (XX)

N/A N/A
XX (XX)
XX (XX)
 BANK
SCENARIO PRIOR CREDITS PRIOR DEBITS PRIOR MONTH BALANCE
+
Deposit in Transit Prior Month
WHAT ACTUALLY HAPPENED N/A N/A
WHAT SHOULD BE XX XX
ADJUSTMENTS XX XX

Deposit in Transit Current Month

WHAT ACTUALLY HAPPENED
WHAT SHOULD BE
ADJUSTMENTS

Outstanding Check Prior Month

WHAT ACTUALLY HAPPENED N/A N/A
WHAT SHOULD BE XX (XX)
ADJUSTMENTS (XX)

Outstanding Check Current Month

WHAT ACTUALLY HAPPENED
WHAT SHOULD BE
ADJUSTMENTS
 BANK
PRIOR CREDITS PRIOR DEBITS CURRENT MONTH BALANCE
+ - =

XX XX
XX
(XX)

N/A N/A
XX XX
XX XX

XX (XX)
(XX)
(XX)

N/A N/A
XX (XX)
XX (XX)
 ERRORS APPLICABLE TO BOTH BA
SCENARIO PRIOR CREDITS/Receipts PRIOR DEBITS/Disburstment
1.) Error last month correct this month
a.) Overstatement of Cash Receipts/Credits
What Actually Happened
What Should be (XX)
Adjustment (XX)

b.) Understatement of Cash Receipts/Credits

What Actually Happened
What Should be XX
Adjustment XX

c.) Overstatement of Cash Disburstment/Debits

What Actually Happened
What Should be (XX)
Adjustment (XX)

d.) Understatement of Cash Disburstment/Debits

What Actually Happened
What Should be XX
Adjustment XX

2.) Errors last month not yet corrected All of what actually happened is Nothing
a.) Overstatement of Cash Receipts/Credits
What Actually Happened
What Should be
Adjustment (XX)

b.) Understatement of Cash Receipts/Credits

What Actually Happened
What Should be XX
Adjustment XX

c.) Overstatement of Cash Disburstment/Debits

What Actually Happened
What Should be (XX)
Adjustment (XX)

d.) Understatement of Cash Disburstment/Debits

What Actually Happened
What Should be XX
Adjustment XX
3.) Errors last month not yet corrected
a.) Overstatement of Cash Receipts/Credits
What Actually Happened
What Should be
Adjustment

b.) Understatement of Cash Receipts/Credits

What Actually Happened
What Should be
Adjustment

c.) Overstatement of Cash Disburstment/Debits

What Actually Happened
What Should be
Adjustment

d.) Understatement of Cash Disburstment/Debits

What Actually Happened
What Should be
Adjustment
S APPLICABLE TO BOTH BANK AND BOOK
PRIOR MONTH BALANCE PRIOR CREDITS/Receipts PRIOR DEBITS/Disburstment

N/A XX
(XX)
(XX) (XX)

N/A XX
XX
XX (XX)

N/A XX
XX
XX (XX)

N/A XX
(XX)
(XX) (XX)

appened is Nothing

(XX)
(XX)

XX
XX

XX
XX

(XX)
(XX)
(XX)
(XX)

XX
XX

(XX)
(XX)

XX
XX
CURRENT MONTH BALANCE

(XX)
(XX)

XX
XX

XX
XX

(XX)
(XX)

(XX)

XX
XX

XX
XX

(XX)
(XX)
(XX)
(XX)

XX
XX

XX
XX

(XX)
(XX)
SPECIAL CASE FOR BOOKS
SCENARIO PRIOR CREDITS/Receipts PRIOR DEBITS/Disburstment
1.) NSF Check returend in the Current was Dated
at the Prior Month
WHAT ACTUALLY HAPPENED
WHAT SHOULD BE (XX)
ADJUSTMENT (XX)

2.) NSF Check Deposited in the Current Month

but returend the month after
WHAT ACTUALLY HAPPENED
WHAT SHOULD BE
ADJUSTMENT

3.) NSF Check was recorded as a reduction to

Cash Receipts
a. Returend Prior Month Recorded Current Month
WHAT ACTUALLY HAPPENED
WHAT SHOULD BE (XX)
ADJUSTMENT (XX)

b. Returend Current Month Recorded Current Month

WHAT ACTUALLY HAPPENED
WHAT SHOULD BE
ADJUSTMENT

4. Unrecorded disburstment Prior Month

Recorded Current Month
WHAT ACTUALLY HAPPENED
WHAT SHOULD BE XX
ADJUSTMENT XX

5. Unrecorded receipt Prior month Recorded

Current Month
WHAT ACTUALLY HAPPENED
WHAT SHOULD BE XX
ADJUSTMENT XX

6. Unrecorded Disbrustment for Prior month not

yet Corrected in Current Month
WHAT ACTUALLY HAPPENED
WHAT SHOULD BE XX
ADJUSTMENT xx
7. Unrecorded Receipt prior month not yet
recorded in Current Month
WHAT ACTUALLY HAPPENED
WHAT SHOULD BE XX
ADJUSTMENT XX

8. Unrecorded Disburstment Current month not

yet recorded
What Actually Happened
What Should be
Adjustment

9. Unrecorded Receipts Current month not yet

recorded
What Actually Happened
What Should be
Adjustment

10. Post Dated/Unreleased Check part of outstanding check on Current Month

What Actually Happened
What Should be
Adjustment

11. Post Dated Check from Customer

What Actually Happened
What Should be
Adjustment

12. Cancelled Check recorded as a reduction of

Cash Disburstment
What Actually Happened
What Should be
Adjustment
13. Check of the company issued prior month
mutilated and retured by the payee. A
replacement check were entered in the the
check registry but no entry was made

What Actually Happened XX

What Should be
Adjustment

14. The company issued a stop order to the bank

in the current month for check issued in the
current month which was not received by the
payee. A new check was written and Recorded.
The old check was written off by a journal entry

What Actually Happened

What Should be
Adjustment

SPECIAL CASE FOR BANK

SCENARIO PRIOR CREDITS/Receipts PRIOR DEBITS/Disburstment
1.) NSF Check returend by bank in Prior Month
and Redeposited and cleared in The Next
Month(Not Corrected by bank)

WHAT ACTUALLY HAPPENED XX

WHAT SHOULD BE
ADJUSTMENT

2.) Payment Directly from the collections

ADJUSTMENT
PRIOR MONTH BALANCE PRIOR CREDITS/Receipts PRIOR DEBITS/Disburstment

N/A XX
(XX)
(XX) (XX)

XX
(XX)
(XX)

(XX)
(XX) N/A
(XX) XX

(XX)
N/A XX
XX XX

XX
(XX) N/A
(XX) (XX)

XX
XX N/A
XX (XX)

(XX)
(XX)
XX
XX

XX
XX

XX
XX

XX
N/A
(XX)

XX
N/A
(XX)

(XX)
N/A
(XX)
 (XX)
N/A
XX

XX XX
N/A N/A
(XX) (XX)

PRIOR MONTH BALANCE PRIOR CREDITS/Receipts PRIOR DEBITS/Disburstment

XX
N/A XX
(XX) XX

XX XX
CURRENT MONTH BALANCE

(XX)
(XX)

XX
(XX)
(XX)

(XX)
(XX)

(XX)
(XX)

(XX)
(XX)

XX
XX

(XX)
(XX)
XX
XX

(XX)
(XX)

XX
XX

(XX)
N/A
XX

XX
N/A
(XX)

XX
N/A
XX
 (XX)
N/A
XX

CURRENT MONTH BALANCE

XX
XX