Bank Reconciliation

DISCUSSION PROBLEMS
1. Bank reconciliation
a. Explains the difference between the bank balance and the balance shown in the depositor’s records.
b. Can help identify cash errors or irregularities that have occurred in accounting for cash, either by the entity or the
bank.
c. Should be prepared by an individual who neither handles nor records cash.
d. All the statements are correct.

2. The following data pertaining to the cash transactions and bank account of Mandirigma Company for the month of
May are available to you:
Cash balance, per records, May 31 P17,194
Cash balance, per bank statement, 5/31 31,948
Bank service charge for May 109
Debit memo for the cost of printed checks
delivered by the bank 125
Outstanding checks, May 31 6,728
Deposit of May 30 not recorded by bank
until June 1 4,880
Proceeds of a bank loan of May 30, net of
interest of P300 5,700
Proceeds from a customer's promissory
note, including interest of P100 8,100
Check No. 2772 issued to a supplier
entered in the accounting records at
P2,100 but deducted in the bank
statement at an erroneous amount of 1,200
Stolen check lacking an authorized
signature, deducted from Mandirigma's
account by the bank in error 800
Customer's check returned by the bank
marked NSF; no entry has been made
in the accounting records to record the
returned check 760
What is the correct cash balance at May 31?
a. P29,200 c. P30,000
b. P30,300 d. P30,900
P18-Kimwell-rpcpa 5/86

3. The information below is from the books of the Seminole Corporation on June 30:
Balance per bank statement P11,164
Receipts recorded but not yet deposited
in the bank 1,340
Bank charges not recorded 16
Note collected by bank and not
recorded on books 1,120
Outstanding checks 1,100
NSF checks - not recorded on books nor
redeposited 160
Assuming no errors were made, compute the cash balance per books on June 30 before any reconciliation
adjustments.
a. P11,404 c. P10,460
b. P12,348 d. P10,220
(Skousen TB 15th ed-AMP)

4. The cash in bank account of S-mart, Inc. for April showed an ending balance of P129,298. Deposits in transit on April
30 was P18,200. Outstanding checks as of April 30, were P59,435, including a P5,000 check which the bank had
certified on April 27. During the month of April, the bank charged back NSF checks in the amount of P3,435 of which
P1,835 had been redeposited by April 20. On April 23, the bank charged S-Mart’s account for a P2,200 items which
should have been charged against K-mart, Inc., the error was not detected by the bank. During April, the proceeds
from notes collected by the bank for S-Mart, Inc. was P7,548 and bank charges for this services was P18.
How much is the unadjusted balance per bank on April 30?
a. P95,263 c. P173,663
b. P88,333 d. P169,263
RPCPA Adapted-AMP

5. If the cash balance in a company’s bank statement is more than the correct cash balance and neither the company
nor the bank has made any errors, there must be
 a. Deposits credited by the bank but not yet recorded by the company
b. Outstanding checks
c. Bank charges not yet recorded by the company
d. Deposits in transit

6. If the cash balance shown in a company’s accounting records is more than the correct cash balance and neither the
company nor the bank has made any errors, there must be
a. Deposits credited by the bank but not yet recorded by the company
b. Deposits in transit
c. Outstanding checks
d. Bank charges not yet recorded by the company

7. If the cash balance shown in a company’s accounting records is less than the correct cash balance and neither the
company nor the bank has made any errors, there must be
a. Deposits credited by the bank but not yet recorded by the company
b. Deposits in transit
c. Outstanding checks
d. Bank charges not yet recorded by the company

8. If the cash balance in a company’s bank statement is less than the correct cash balance and neither the company nor
the bank has made any errors, there must be
a. Deposits credited by the bank but not yet recorded by the company
b. Outstanding checks
c. Bank charges not yet recorded by the company
d. Deposits in transit
Use the following information for the next four questions.
Shown below is the bank reconciliation for YOUR Company for the month of May:
Balance per bank, May 31 P75,000
Add: Deposits in transit 12,000
Total 87,000
Less: Outstanding checks P14,000
Bank credit recorded in error 5,000 19,000
Cash balance per books, 5/31 P68,000
The bank statement for the month of June contains the following data:
Total deposits P55,000
Total charges, including an NSF check of
P4,000 and a service charge of P200 48,000
All outstanding checks on May 31, including the bank credit, were cleared in the bank in June.
There were outstanding checks of P15,000 and deposits in transit of P19,000 on June 30.
9. Cash receipts per books in June is
a. P74,000 c. P62,000
b. P43,000 d. P48,000
10. Cash disbursements per books in June is
a. P90,200 c. P44,800
b. P42,800 d. P39,800
11. Cash balance per books as of June 30 is
a. P82,000 c. P86,000
b. P85,200 d. P90,200
12. Cash balance as adjusted as of June 30 is
a. P82,000 c. P86,000
b. P85,200 d. P90,200
(P16&17-Kimwell-rpcpa 10/87;aicpa 5/90) - AMP

Use the following information for the next two questions.

Banaue Company deposits all receipts and makes all payments by check. The following information is available from the
cash records:
May 31 Bank Reconciliation
Balance per bank P262,460
Add: Deposits in transit 21,000
Deduct: Outstanding checks ( 38,000)
Balance per books P245,460

Month of June Results Per Bank Per Books

Balance June 30 P279,950 P303,550
June deposits 107,840 158,890
June checks 111,000 100,800
June note collected (not
included in June deposits) 30,000 -0-
June bank service charge 350 -0-
June NSF check of a customer
returned by the bank
(recorded by bank as a
charge) 9,000 -0-

13. The deposits in transit as of June 30 is

a. P72,050 c. P51,050
b. P70,250 d. P42,050

14. The outstanding checks as of June 30 is

a. P27,800 c. P37,150
b. P28,700 d. P31,750

SOLUTION GUIDE #13:

Deposits in transit, beg P xx

Collections this period xx
Total xx
Deposits credited by bank this period ( xx)
Deposits in transit, end P xx
SOLUTION GUIDE #14:

Outstanding checks, beg P xx

Checks issued this period xx
Total xx
Checks paid by bank this period ( xx)
Outstanding checks, end P xx

15. The following information was included in the bank reconciliation for Ryan, Inc. for June. Assume all other reconciling
items are listed.
Checks and charges recorded by bank in
June, including a June service charge
of P600 P344,200
Service charge made by bank in May and
recorded in the books in June 400
Total of credits to Cash in all journals
during June 396,040
Customer’s NSF check returned as a bank
charge in June (no entry made on
books) 2,000
Customer’s NSF check returned in May and
redeposited in June (no entry made
on books in either May or June) 5,000
Outstanding checks at June 30 265,200
Deposits in transit at June 30 12,000
What was the total of outstanding checks at the beginning of June?
a. P319,240 c. P219,360
b. P211,160 d. P213,160
Cabrera

SOLUTION GUIDE #15:

Outstanding checks, beg P xx

Checks issued this period xx
Total xx
Checks paid by bank this period ( xx)
Outstanding checks, end P xx