Name: Clicel Joy Intes Jumawan

Course and Year: BSA 1

Subject: Conceptual Framework and Accounting Standards/ IA 1
Teacher: Hamod M. Gulidtem, CPA
Date: June 4, 2022

QUESTIONS
1. What is a two-date bank reconciliation?
Two-date bank reconciliation is the process of matching the cash balance per
book and cash balance per bank and literally involves two dates. A two-date
reconciliation follows the same steps as a one-date reconciliation. Only when
specific facts or data are excluded from a two-date reconciliation becomes
problematic, necessitating their computation. However, if all of the facts are
available, reconciliation statements can be made for the two dates specified (Valix
et al., 2020).

2. Explain book debits.

Cash receipts (cash received) or all items debited to the cash in bank account
are referred to as book debits. In the absence of any statements to the contrary, book
debits are assumed to be cash receipts deposited. All items debited to the cash in
bank account which do not represent deposits should be deducted from the book
debits total to arrive at the cash receipts deposited (Valix et al., 2020).

3. Explain book credits.

Cash disbursements (cash) or all items credited to the cash in bank account
are referred to as book credits. But as a rule, all book credits in the absence of any
statement to the contrary are assumed to be checks issued. All items not representing
checks credited to the cash in bank account should be deducted from the book credits
total to arrive at the checks drawn by the depositor (Valix et al., 2020).
4. Explain bank debits.
All items debited to the depositor’s account are referred to as bank debits,
which include checks paid by bank and debit memos. Bank debits are assumed to be
checks that have been paid by the bank unless otherwise stated. All items debited to
the account of the depositor not representing checks paid should be deducted from
the bank debits total to arrive at the checks paid by bank (Valix et al., 2020).

5. Explain bank credits.

All items credited to the depositor’s account, including deposits
acknowledged by the bank and credit memos, are referred to as bank credits. Bank
credits are assumed to represent deposits acknowledged by bank in the absence of
any statement to the contrary. All items credited to the depositor’s account which do
not represent deposits should be deducted from the bank credits to determine the
deposits acknowledged by bank (Valix et al., 2020).

6. What is the formula in the computation of balance per book?

Below is the formula in the computation of balance per book (Valix et al.,
2020):
Balance per book – beginning of month XX
Add: Book debits during the month XX
Total XX
Less: Book credits during the month XX
Balance per book – end of month XX
7. What is the formula in the computation of balance per bank?
Below is the formula in the computation of balance per bank (Valix et al.,
2020):
Balance per bank – beginning of month XX
Add: Bank credits during the month XX
Total XX
Less: Bank debits during the month XX
Balance per bank – end of month XX

8. What is the formula in the computation of deposits in transit?

Below is the formula in the computation of deposits in transit (Valix et al.,
2020):
Deposits in transit – beginning of month XX
Add: Cash receipts deposited during the month XX
Total deposits to be acknowledged by bank XX
Less: Deposits acknowledged by bank during month XX
Deposits in transit – end of month XX

9. What is the formula in the computation of outstanding checks?

Below is the formula in the computation of outstanding checks (Valix et al.,
2020):
Outstanding checks – beginning of month XX
Add: Checks drawn by depositor during the month XX
Total checks to be paid by bank XX
Less: Checks paid by bank during the month XX
Outstanding checks – end of month XX
10. What is a proof of cash?
According to Bragg (2022), a proof of cash is essentially a forwarding of each
line item in a bank reconciliation from one accounting period to the next, with
distinct columns for cash receipts and disbursements. Elks (2018) also stated that,
the proof of cash reconciles the four parts that make up the cash balance: beginning
balance, cash inflows, cash outflows, and ending balances for both the bank
statement balance and the ending book balance.
A proof of cash is a more comprehensive reconciliation that includes receipts
and disbursements. This method could be beneficial in identifying potential
anomalies in cash handling, especially where cash receipts have been reported but
not deposited. There are three different types of proof of cash (Valix et al., 2020):
a) Adjusted balance method
b) Book to bank method
c) Bank to book method

REFERENCES:

Bragg, S. (2022, May 15). Proof of cash definition. AccountingTools. Retrieved

June 4,2022, from https://www.accountingtools.com/articles/what-is-a-
proof-of-cash.html

Elks, D. (2018, January 23). Bank Reconciliation vs. Proof of Cash. Linkedin.
Retrieved June 4,2022, from https://www.linkedin.com/pulse/bank-
reconciliation-vs-proof-cash-david-elks

Valix, C. T., Peralta, J. F., Valix, C. A. (2020). Intermediate Accounting Volume 1

(2020 edition). GIC ENTERPRISES & CO., INC