Professional Documents
Culture Documents
Fundamentals
of Accountancy,
Business and
Management 2
Quarter 2 – Module 8.1:
Bank Reconciliation Statement
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What I Need to Know
This module was designed and written with you in mind. It is here to help you master
the Bank Reconciliation Statement. The scope of this module permits it to be used in
many different learning situations. The language used recognizes the diverse
vocabulary level of students. The lessons are arranged to follow the standard sequence
of the course. But the order in which you read them can be changed to correspond with
the textbook you are now using.
The module has one lesson, namely:
Lesson 1: Describe and identify the common reconciling items of a bank
reconciliation statement and its nature
What I Know
A. Bank Statement
C. Income Statement
B. Bank Reconciliation Statement
D. Financial Statement
2. How many reciprocal accounts should be reconciled in a bank reconciliation?
A. 1
C. 3
B. 2
D. 4
3. After all the adjustments made, what should be the result of the reciprocal
accounts have?
A. Different balance
C. Unpredicted Balance
B. Same balance
D. Zero balance
4. Bank reconciliations statement prepared to show that the cash balance
per book and bank records has no discrepancy.
A. Annually
C. Monthly
B. Daily
D. Quarterly
5. These are items added made by the bank but not yet recorded by the depositor.
1
A. Credit Memo B. Debit Memo
2
C. Deposit in Transits D. NSF Checks
6. A cash or check deposit recorded by the company but not recorded by the bank
that deposited after the cut-off.
A. Credit Memo
C. Deposit in Transits
B. Debit Memo
D. NSF Checks
7. These are items deducted made by the bank but not yet recorded by the
depositor.
A. Credit Memo
C. Deposit in Transits
B. Debit Memo
D. Outstanding Checks
8. Which is not a bank reconciling items?
A. Bank errors
C. NSF Checks
B. Deposit in Transits
D. Outstanding Checks
9. Which is not a book reconciling items?
A. Credit Memo
C. NSF Checks
B. Debit Memo
D. Outstanding Checks
10. Which is a book reconciling items?
A. Bank Errors
C. Auto Debit
B. Deposit in Transit
D. Outstanding Checks
11. Which of the following is not an example of a Credit Memo?
A. Bank Service Charge
B. A collection made by the bank
C. Interest Income earned by the account holder
D. Proceed from loan added by the bank
12. Which of the following is an example of a Debit Memo?
A. Automatic payments of bills on behalf of the account holder
B. A collection made by the bank on behalf of the account holder
C. Deposit in Transit
D. Outstanding Checks
13. Why is bank reconciliation being prepared?
A. To gather data from the company’s record and bank statement
B. It explains the difference between the reposted cash balance per book and bank
C. Provide information for adjusting journal entries
D. For reporting
14. Items that are erroneously recorded by the company.
A. Book errors
C. Collection by the banks
B. Bank errors
D. Payments of Loan
15. Items that are correctly recorded by the company but erroneously recorded by
the bank
A. Book errors B. Bank errors
C. Collection by the banks D. Payments of Loan
What’s In
Write down what you think the best answer there is. Write your answer on a separate sheet of
paper.
Answer the following questions.
What’s New
Read the situation carefully, then reread it again until you understand and find the right answer.
Write your answer on a separate sheet of paper.
Read the following transactions and identify the cause based on time difference or
errors made by the business firm/bank. Put a check sign (√) for the correct cause.
TRANSACTIONS TIME ERRORS made by
DIFFERENCE the company/bank
1. Bank Fees deducted to the company’s
current account by the bank.
2. Checks deposited into the bank but not
yet cleared by the bank.
3. Interest added by the bank but not
recorded in the company’s cash book.
4. Checks amounting to P4,000 given to
ABC Company but recorded as P400 in
the cash book.
5. Checks issued to customers for payment
but not presented in the bank
What is It
Bank service charges - are fees such as check printing and processing that the bank
deducts from the depositor.
NSF (no sufficient fund) check - is a check that was dishonored and returned by
the bank to the person or company writing the check because that account did not have
enough funds.
Book Errors - are items erroneously recorded by the company. For example, the
company deposit P20,000 but recorded it P2,000.
Outstanding Checks - checks issued by the company to payees but not yet encashed
with the bank or cleared by the bank. For example, on April 27, 2019, AKO Company
issued and recorded a P1,000 check in favor of IKAW Company. April 28, 2019, IKAW
Company picked -up the check and was deposited on May 1, 2019, and cleared by the
bank on May 2, 2019. In this scenario, the check deducted to the book cash balance in
April; however, deduction in the bank was made in May. Therefore, comparing the
balance of the company's book and bank records shows that bank records have a higher
balance than the company's book. Which of the two records is correct? The company's
accounting record is correct that aims to determine the amount of cash it can use, and
it was already promised to the payee the amount of P1,000 on April 28, 2019.
Bank Errors - are items erroneously recorded by the bank. For example, a check
deposit of P10,000 was recorded P1,000.
Activity 1
I P K Q R L V X P U H A Z Q E R L O J C
T U S B E X M R W N S U B N F I V M I W
J T Q X L B K W D U A W X K S M E E L I
N P R G E U F P H Y E S I C I U W M I D
X B L C F T T F H L A R B V C B N T F F
J Z S X T C D D M L P I K M H E K I W G
S K C E H C G N I D N A T S T U O D G N
E G R A H C E C I V R E S K N A B E V V
L T I S N A R T N I T I S O P E D R O D
D E B I T M E M O V A F D F A C F C W N
Down:
Across:
1. ex. payment of loans
4. ex. interest income
2. NSF is no sufficient
5. time difference and
3. Deposit in
6. compared reciprocal
account
Activity 2 WHAT AM I?
Identify what reconciling item of the book or bank the following independent
transaction. Write your answer on a separate sheet of paper.
1. Debit memos are items added by the bank but have not been added by the book as
of the cut-off date.
2. Credit memos are items that have been deducted by the bank but have not been
deducted per book.
3. Debit memos are collections from receivables by the bank on behalf of the company
and proceeds from loans directly added by the bank to the account of the depositor.
Answer the question to test your understanding. Write your answer on a separate
sheet of paper.
1. What is bank reconciliation?
3. What is the book reconciling items? Explain by giving an example on one of the items?
4. What are the bank reconciling items? Explain by giving an example on one of the
items?
5. What are the common causes of discrepancy between cash balance per book and
bank? Explain each.
What I Can Do
Column A Column B
Assessment
WORD BOX. Choose from the box the missing word on the sentence below.
Write your answer on a separate sheet of paper.
additions deductions reconcile difference
sufficient encash monthly
bankcut-off account adjusted same
errors time difference separate reviewed
book Errors
1. Outstanding Checks are checks been issued by the company to payee but not yet
cleared by the bank.
2. Deposit in Transit often happens where deposits were mailed to the bank or checks
were cleared after .
3. Bank reconciliation statement is a report that is prepared to reconcile
two reciprocal accounts.
4. NSF stands for no funds.
5. Debit Memo is made by the bank to the account of the depositor.
6. are items erroneously recorded by the company.
7. A business that has two or more bank accounts will have bank
reconciliations statements.
8. method is a method that adjusts both balances per bank and balances
per book to determine the correct cash balance separately.
9. Credit Memo is made by the bank to the account of the depositor.
10. According to Merriam-webster dictionary, means “to cause people or
groups to become friendly again after an argument or disagreement.”
11. The common causes of discrepancy seen in bank reconciliation are and
errors.
12. These reciprocal accounts should have balance after adjustment have
made.
13. Once a bank statement was received, it should be and compared with
the business accounting records.
14. A bank reconciliation statement is prepared by the holder.
15. A bank reconciliation statement is mainly prepared for reconciling the between the
bank balance shown by the cash book and bank passbook.
Additional Activities
MATCHING TYPE: From the items in the box, classify the items as to reconciling
items per bank or per book. Indicate whether the adjustment is an addition (+) or
deduction (-) using the related symbol. Write your answer on a separate sheet of paper.