FINANCIAL ADMINISTRATION

Simulation 4 – Credit Card Reconciliation

Due Date: Refer to the Due Dates in the Course Overview and Schedule module
Grading: Worth 10% of your final grade

Definitions:

A credit card statement is a financial document that provides a detailed list of all the
expenses incurred using a credit card.

Reconciliation refers to the process of comparing transactions you have recorded for a
financial account (or it could be receipts you retained for each transaction you made)
against a monthly statement from a bank, credit card, or other financial institution.

Upon completion of this activity, you will be able to:

 Use a chart of accounts.

 Perform credit card reconciliations.

Part 1: Reconciliation of a Credit Card Statement.

Title: Nicole Milne, Administrative Assistant

Location: Victoria, British Columbia

Company: Evolution Human Resource Services

Department: Marketing

Instructions: Reconcile the list of expenses in Table 1 with the credit card statement in
Table 2 by placing a check mark in the reconciled column in Table 2 and answer the
questions that follow.

Daily Meal Allowances (excluding taxes): Breakfast $20; Lunch $30; Supper $50.

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Table 1. Receipts submitted by employee, Sonic Hedgehog, for May 2 nd to May 6th,
2020.

Date of Issue: May 2, 2020

Booking: 21622112 Airline Booking Reference: RYGU6E

GUEST: Sonic Hedgehog

Air Canada – Return Air Fare Economy

Departure: Terminal CLASS Carrier Flight Dep Arrival

FROM: Victoria Seat 16E Y Air Canada AC302 11:30 19:13

TO: DATE:
Montreal, QC May 2, 2020

RETURN: Terminal CLASS Carrier Flight Dep Arrival

FROM: Montreal, QC Seat 17F Y Air Canada AC309 18:30 20:49

TO: DATE:
Victoria May 6, 2020

Ticket Number: 0142106352718

Date of Issue: 20200502

Ticket Particulars: NOREF/NONEND

Ticket Price $708.64 (Air Taxes & Fees, Combined Taxes) in Canadian dollars

Paid by Visa *************03333

May 2/20 May 3/20

Air Canada Montreal Parking Depot

On-Board Meal Service
1102 Rue de Bleury
Meal Tray $13.50 Montreal, QC

Tax (12%): $ 1.62 Parking

$18.00
Total: $15.12
VISA: ************03333
VISA ************03333

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May 2/20 May 3/20

Budget Rent A Car Bagel St-Henri

Booking Number: 20-757 4354 Saint-Antoine W

Montreal, QC
Confirmation Number: 8-7892
Bagel and Coffee special
Name: Sonic Hedgehog $3.75
Pick up: May 2, 2020 VISA: ************03333
Drop off: May 6, 2020
Kia Sorento
License Plate: 167 MQC
May 4/20
Sub-Total: 305.09
Montreal Parking Depot
Tax: 29.48
1102 Rue de Bleury
Total: 334.57
Montreal, QC
*Note: Car must be returned with a full tank of
Parking
gas or a $40 fee will be added to your total.
$18.00
VISA: *********0333
VISA: ************03333

May 3/20 6:30 p.m. May 4/20 7:00 p.m.

Le St-Urbain Montreal Plaza

96 Rue Fleury O 6280 Rue St-Hubert
Montreal, QC Montreal, QC

Saumon sauvage, haricots verts, seigle, Salade Foodchain $15.00

radis, crème fraiche a l’ortie
Canelloni $25.00
$32.00
Alsace, Kritt Pinot Blanc $14.00
Chardonnay $14.00
Sub-Total: $54.00
Sub- Total: 46.00
GST: 2.70
GST: 2.30
QST: 5.39
QST: 4.59
Total: 62.09
Total: 52.89
VISA: ************03333
VISA **************03333

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May 5/20
May 6/20
Montreal Parking Depot
Montreal Parking Depot
1102 Rue de Bleury
Montreal, QC 1102 Rue de Bleury
Montreal, QC
Parking $18.00
Parking $18.00
VISA: ************03333
VISA: ************03333

May 6/20 5:00 p.m.

Petro-Canada Gas May 6/20 12:30 p.m.

Total: $25.00 Damas

1201 Avenue Van Horne, Outremont
VISA: ************03333
Montreal, QC

Borek Jibne $19.00

May 6, 2020
Tea $ 3.50
Le Dauphin Montreal Centre-Ville

Guest: Sonic Hedgehog

Sub-Total: $22.50
Regular Room - Room No: 458 GST: 1.13
QST: 2.24
Booking Number: LD72389 Total: 25.87
Confirmation Number: 20-784638
VISA: ************03333
Check in: May 2, 2020

Check out: May 6, 2020

2/5/20 Room Charge $159

3/5/20 Room Charge $159 May 6/20 5:15 p.m.
4/5/20 Room Charge $159
5/5/20 Room Charge $159 Air Canada
Baggage Handling Fee
Sub-Total: $636.00
Hotel Tax (3%): $ 19.08
GST (5%): $31.80
Total: $30.00
TVQ (7.5%): $47.70

Total: $734.58 VISA: ************03333 4

VISA ***********03333
 FINANCIAL ADMINISTRATION

Table 2. Credit Card Statement for the month of May.

Billing Account Number Account Transact Merchant Gross Reconciled

Date Holder ion Date Amount

31/05/20 XXXXXXXXX03333 Sonic Hedgehog 02/05/20 Air $1708.64 Over
Canada, ticket
Airfare amount-
Correct
cost is
$708.64 –
Call
Credit
Card
Company
31/05/20 XXXXXXXXX03333 Sonic Hedgehog 02/05/20 Air $30.00
Canada,
Baggage
Fee
31/05/20 XXXXXXXXX03333 Sonic Hedgehog 02/05/20 Air $15.12
Canada
On-Board
Meal Tray
31/05/20 XXXXXXXXX03333 Sonic Hedgehog 02/05/20 Budget $357.00 Correct
Rent A Car cost is
$334.57 –
Call
Credit
Card
Company
31/05/20 XXXXXXXXX03333 Sonic Hedgehog 03/05/20 Le St- $52.89
Urbain
31/05/20 XXXXXXXXX03333 Sonic Hedgehog 03/05/20 Montreal $18.00
Parking
Depot
31/05/20 XXXXXXXXX03333 Sonic Hedgehog 04/05/20 Montreal $62.09
Plaza
31/05/20 XXXXXXXXX03333 Sonic Hedgehog 04/05/20 Montreal $18.00
Parking
Depot
31/05/20 XXXXXXXXX03333 Sonic Hedgehog 05/05/20 Maison $27.00 No
Publique Receipt
31/05/20 XXXXXXXXX03333 Sonic Hedgehog 05/05/20 Montreal $18.00
Parking
Depot
31/05/20 XXXXXXXXX03333 Sonic Hedgehog 06/05/20 Le $51.95 No

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Billing Account Number Account Transact Merchant Gross Reconciled

Date Holder ion Date Amount

Diplomate Receipt
31/05/20 XXXXXXXXX03333 Sonic Hedgehog 06/05/20 Montreal $18.00
Parking
Depot
31/05/20 XXXXXXXXX03333 Sonic Hedgehog 06/05/20 Le $734.58
Dauphin
Montreal
Centre-
Ville
Montreal
31/05/20 XXXXXXXXX03333 Sonic Hedgehog 06/05/20 Damas $25.87

31/05/20 XXXXXXXXX03333 Sonic Hedgehog 06/05/20 Petro $25.00

Canada
31/05/20 XXXXXXXXX03333 Sonic Hedgehog 07/05/20 Damas $25.87 No
Receipt
Total: $3188.01 $2060.76

Part 2: Short Answer Questions.

1. Were all the credit card transactions reconciled? Yes or No?

No, not all credit card transactions were reconciled.

2. If you answered no to question one, which items were not reconciled? Why?

1. Air Canada Airfare receipt was $708.64 – Card was charged $1000.00 over.
2. Budget Rent-A-Car receipt shows $334.57 – Card was charged $357.
3. There is no receipt for Maison Publique for $27.00.
4. There is no receipt for Le Diplomate for $51.95.
5. There is only one receipt for Damas for $25.87 but two charges to the card.

Daily Allowances
- Dinner at Montreal Plaza was $4.00 over the spending limit before taxes.
However, it was reconciled.

3. What happens if you are over charged by your credit card company? How would you
rectify this situation?

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If you are over charged by the credit card company, you would need to call them
to rectify the situation. To do so, be sure that you have all receipts handy to
review with them. You can only write off the amount that the receipt says.

4. Why is it important to keep a record of all your credit card transactions or keep
copies of all the expense receipts? What happens if a receipt is missing?

It’s important to keep a record of all credit card transactions and keep copies of
all expenses because it will allow you to justify any discrepancies that may occur.
If a receipt goes missing and there is a transaction discrepancy, you now have no
proof of the actual transaction amount and may have to cover the over charge
yourself.

5. Why is the process of reconciliation so important?

The process of reconciliation is important because it allows you to ensure that all
transactions are balanced and that you are not being over charged. It also allows
you to monitor the spending to ensure that no one is using the company credit
card for personal expenses.

6. How often should you reconcile your accounts?

You should reconcile your accounts as you go for day to day transactions and go
over everything again on a monthly basis.

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7. Using the Chart of Accounts in Table 3, indicate the full account number (Office,
Department, and Expense codes) you would charge each item to in Table 4.

Table 3. Chart of Accounts (COA).

Office Office Departmen Department Type of Expense Expense

Location Code t Codes Codes
s
St. John 101 Sales 2300 Accommodations 61220
Charlottetow
n 102 Marketing 2301 Meals 61224
Halifax 103 Finance 2602 Memberships 61330
Travel (Plane, Car,
Fredericton 104 Facilities 2632 Bus) 61555
Quebec City 105 Sales 2300 Honorariums 61080
Toronto 106 Promotions 71250
Winnipeg 107 Office Supplies 71149
Professional
Regina 108 Development 71150
Edmonton 109 Membership & Dues 71425
Victoria 110 Telecommunication 72010
Other/Miscellaneous 71110

Table 4. Expenses with Chart of Account Codes.

Merchant Full Account Code

Air Canada, Plane Ticket 105-2602 - 61555
Air Canada Baggage Fees 105-2602 - 61555
Le Dauphin Montreal Centre-Ville Hotel 105-2602 - 61220
Meals 105-2602 - 61224
Budget Rent A Car 105-2602 - 61555
Parking 105-2602 - 61220
Gas 105-2602 - 61220
(Office) – (Department) – (Type of Expense)