Implementing the

GOVERNMENT ACCOUNTING MANUAL

(For National Government Agencies)

Slide 15 - 1
 Session 15 – Preparing
Bank Reconciliation Statements

GAM: Accounting Session 15: Preparing Bank Reconciliation Statements Slide 15 - 2

 Session Overview

The Purpose of
BRS

Bank Bank and Book

Reconciliation Reconciling
Process
Items

GAM: Accounting Session 15: Preparing Bank Reconciliation Statements Slide 15 - 3

 Learning Objective

To be able to prepare Bank Reconciliation Statement in

accordance with the procedure and format prescribed in the
Government Accounting Manual as evaluated by the
instructor.

GAM: Accounting Session 15: Preparing Bank Reconciliation Statements Slide 15 - 4

 The Purpose of Bank Reconciliation Statement

 check correctness of both the

bank’s and agency’s records
 serve as a deterrent
to fraud
 enable the
agency/bank to take
up reconciling items

GAM: Accounting Session 15: Preparing Bank Reconciliation Statements Slide 15 - 5

 Bank Statement

Statement issued by the bank which reflects the

transactions in the agency’s (depositor’s) bank account for
a period.

Deposits-in-Transit
Deposits in the bank but which are yet to be recorded
until the next period.

GAM: Accounting Session 15: Preparing Bank Reconciliation Statements Slide 15 - 6

 Outstanding Checks

Checks the agency has issued and recorded but which

have not been presented to the bank for payment.

Credit Memo
Documents issued by the bank informing an increase in
the depositor’s (Agency’s) account for such things as
previous bank debit errors and collection directly deposited
to the agency bank account. Slide 10-1

GAM: Accounting Session 15: Preparing Bank Reconciliation Statements Slide 15 - 7

 Debit Memorandum
Bank document which reports a decrease in the account of
the depositor.

Returned Check
a check that is not honored by the bank because of errors
or deficiencies in the maker’s account

GAM: Accounting Session 15: Preparing Bank Reconciliation Statements Slide 15 - 8

 Preparation of BRS
1
Prepared by Chief 2 3
Accountant/ Prepared for each Adjusted Balance
designated staff bank accounts Method
monthly maintained

4 5
Prepare Monthly BRS
within Ten (10) days Prepare BRS in 4
from the receipt of copies
Bank Statement

GAM: Accounting Session 15: Preparing Bank Reconciliation Statements Slide 15 - 9

Submission
The Chief Accountant shall submit the BRS
within 20 days after receipt of the monthly BS
to the following:
 Original - Auditor (with all the
supporting documents & JEVs)
 Copy 2 - Head of Agency
 Copy 3 - GAS, COA
 Copy 4 - Agency Accounting file

GAM: Accounting Session 15: Preparing Bank Reconciliation Statements Slide 15 - 10

 Exercise 15-A

A. Analyze and C. Gather necessary

determine Bank and
documents
Book Reconciling
Items B. Calculate
correct
D. Prepare BRS book/bank
and JEV balances
F. Set beginning
E. Add (Deduct ) Bank book and bank
Reconciling items balances
GAM: Accounting Session 15: Preparing Bank Reconciliation Statements Slide 15 - 11
 Preparation of the BRS

1 C. Gather necessary documents

2 G. Set beginning book and bank balances

3
A. Analyze and determine Bank and Book
Reconciling Items
4 F. Add (Deduct ) Bank/Book Reconciling Items Solution
5 B. Calculate correct book/bank balances
6 D. Prepare BRS and JEV

GAM: Accounting Session 15: Preparing Bank Reconciliation Statements Slide 15 - 12

 Reconcile Balances
Cash - AGDB
Accounts

Cash - MDS
Accounts
GAM: Accounting Session 15: Preparing Bank Reconciliation Statements Slide 15 - 13
 Reconciling Items for AGDB Accounts

Book Reconciling Items Bank Reconciling Items

Description Treatment Description Treatment
Add (Deduct) Add (Deduct)
Unrecorded Deposits Add Deposits-in-Transit Add
Canceled Check Add Errors Add/(Deduct )
Credit Add Outstanding Checks Deduct
Memorandum
Bank Charges Deduct
Debit Memorandum Deduct

GAM: Accounting Session 15: Preparing Bank Reconciliation Statements Slide 15 - 14

 Reconciling Items for MDS Accounts

Book Reconciling Items Bank Reconciling Items

Description Treatment Description Treatment
Add (Deduct) Add (Deduct)
Unrecorded NCA Add Unrecorded NCA Add
Canceled Check Add Errors Add/(Deduct )
Credit Add Outstanding Checks Deduct
Memorandum
Lapsed NCA Deduct
Lapsed NCA Deduct
Bank Charges Deduct
Debit Memorandum Deduct

GAM: Accounting Session 15: Preparing Bank Reconciliation Statements Slide 15 - 15

 Particulars Agency Bank
     
Adjusted Balance Method
Unadjusted Balances xxx xxx Bank Reconciliation Statement
Add/Deduct: Bank    
Reconcilng Items     – MDS Account
1. Unrecorded NCA   xxx
2. Errors which understates the    
bank balance   xxx
3. Lapsed NCA   (xxx)
4. Outstanding Checks   (xxx)
5. Errors which overstates the    
bank balance   (xxx)
     
Add/Deduct: Agency Book    
Reconcilng Items    
1. Unrecorded NCA xxx  
2. Cancelled Checks xxx  
3. Errors which understates the    
book balance xxx  
4. Lapsed NCA (xxx)   * - Lapsed NCAs are deducted
5. Errors which overstates the    
book balance (xxx)   and Unrecorded NCAs are
6. Bank Charges
Adjusted Balances
(xxx)
xxx
 
xxx
added
GAM: Accounting Session 15: Preparing Bank Reconciliation Statements Slide 15 - 16
 Particulars Agency Bank
     
Unadjusted Balances xxx xxx
Add/Deduct: Bank     Adjusted Balance Method
Reconcilng Items     Bank Reconciliation
1. Unrecorded Deposit/    
Deposit in transit   xxx Statement – AGDB
2. Errors which understates the    
bank balance   xxx
3. Outstanding Checks   (xxx)
4. Errors which overstates the     (xxx)
bank balance  
     
Add/Deduct: Agency Book    
Reconcilng Items    
1. Unrecorded Deposit xxx  
2. Cancelled Checks xxx  
3. Errors which understates the    
book balance xxx  
4. Returned Check deposits (xxx)  
5. Errors which overstates the    
book balance (xxx)  
6. Bank Charges (xxx)  
Adjusted Balances xxx xxx
GAM: Accounting Session 15: Preparing Bank Reconciliation Statements Slide 15 - 17
GAM: Accounting Session 15: Preparing Bank Reconciliation Statements 18 Slide 15 - 18
 EXERCISE 15-B

GAM: Accounting Session 15: Preparing Bank Reconciliation Statements Slide 15 - 19

GAM: Accounting Session 15: Preparing Bank Reconciliation Statements Slide 15 - 20