A blessed and wonderful day ABM

Students!
Let us have a short review
 At the end of the lesson learners
should be able to:
1. describe the nature of the bank reconciliation statement;
2. identify common reconciling items and describe each
of them;
3. analyze the effects of the identified reconciling items;
and
4. prepare a bank reconciliation statement
Are you familiar with the
word “reconcile”?

to
According to the Merriam-Webster Dictionary, reconcile means “
cause people or groups to become friendly
again after an argument or disagreement; to
restore friendship or harmony.”
 Have you ever experienced
reconciling with people whom you
had an argument or conflict in the
past?
 Reconciliation is also used in
business.
A bank reconciliation statement
resolves the differences of two
account balances- the book and
bank account balance
 Activity 2- Think, Ponder and Share!!!!

Group the students by six, altogether collaborate which is the

reconciling item being described on the screen, one member of the
group will go in front and show the answer, then explain the
adjustments to be made to reconcile the book and Bank Account.
Let us
start!!
 Bank Reconciliation - the
procedure to reconcile the
unadjusted bank and book
balances to the correct cash
balance.
 1.Reconciling items that result from timing
differences occurs when transactions are recorded
on the bank’s and the company’s accounting books
at different dates, such as : outstanding checks,
deposit in transit, collections received directly by
the bank, debit and credit memo and NSF checks
2. Errors are unintentional mistakes. It should
be carefully analyzed to determine the proper
adjustment to the bank reconciliation.
Comprehensive Problem: Elvis Company
The balance of the general ledger cash account as
of December 31, 2017 is P7,120. On the other
hand, the bank statement showed a December 31,
2017 balance of P6,580.00. You were tasked to
prepare bank reconciliation statement for the
company’s bank account.
Your analysis of the bank statement and the general ledger account revealed the following:

Deposit in Transit P1,345

Credit Memo for direct collection of a note receivable 755
Credit Memo for interest income 65
Auto debit of cell phone bill 290
Customer NSF check 455
Outstanding check 575
Debit memo for bank charges 25
A check received from a customer was recorded in the
accounting books for P3,280. The bank statement
revealed that the customer check cleared at the correct
amount of P3,820.
The bank deducted P360 from the account of Elvis for a
check issued by Elvira Inc.
Required: Prepare the bank reconciliation statement as
of December 31, 2017 for Elvis’ bank account.
Problem: The accountant of Jonathan
Manufacturing Company was tasked to perform
monthly bank reconciliation. She downloaded the
company’s April 30 bank statement that showed a
balance of P32,400. She also printed the cash
ledger from the company’s computerized
accounting system. It contains the ending balance
of P8,350.00. She also found the following
reconciling items:
a. The bank statement showed bank service fee of P800.
b. The bank collected P1,500 from a note receivable from
Jonathan Manufacturing. Also, a collection fee of P250 was
charged.
c. Deposits in Transit, P51,000.
d. Checks outstanding on May 31, P79,100
e. The accountant found a check issued to Rhys Corp. for
P4,500 that cleared the bank but was not in the cash ledger.
Required: Prepare a Bank Reconciliation Statement
SMITH Corporation.The company reported an
unadjusted book balance of P142,000, The bank
statement shows an unadjusted balance of P232,000. The
bank credited P5,000 to the account of the company for a
bank loan that it has requested, It also charged a P1,000
bank penalty. An outstanding check worth P23,000 was
not yet recorded by the bank.
1. How much is the adjusted cash balance for the month?
2. How much is the deposit in transit for the month?
Tip: Tocompute for the adjusted cash
balance, the accountancy student
must make use of which is more
complete, the book or the bank
Reconcile the bank account and the
accounting books based on the following
information:
1. The bank statement for the
account of Hungry Joe Company
reflects the July 31 balance of
P54,780.00
Reconcile the bank account and the
accounting books based on the following
information:
a. The bank statement for the
account of Hungry Joe Company
reflects the July 31 balance of
P54,780.00
b. P68,757 was the ending balance of
the general ledger cash account on
July 31.

c. A check issued by Hungry Joe

Company for P3,000 was recorded in
the accounting books as P4,500.
d. checks that were issued and received by
payees that have not yet cleared the bank
as of July 31 totaled to P9,885.
e. Bank service charge according to
the July bank statement is P210.
Hungry Joe ‘s accountant has not yet
recorded this on the books.
f. Deposit in transit as for July amounted
to P13,425
g. Comparison of the accounting
records and bank statement showed
a July 3 P600 deposit (with validated
deposit slip on file) that was not
found in the bank statement.
h. There were two customers checks that
were dishonored by the bank in July for
nonsufficient funds:
From Cris Corporation = P1,296
From May Incorporated = P14,265
i. The accountant made an error in
recording the July 24 deposit. It was
reflected in the books for P2,895 instead
of P2,700
j. A customer directly deposit their P4,500
payment to the bank. This was not yet
recorded in the accounting books because
the customer neglected to fax the deposit
slip to Hungry Joe
k. The bank statement reflected interest
income for December for P129
 Fill out the blanks by
choosing an object, a
place, a person or an
animal which you think
shares the same
characteristics as
Bank Reconciliation and
explain why.
Outstanding Bank errors
Checks
Direct Collections Book Errors
of the banks
Credit Memo Customer’s NSF cheks

Deposit in Transit Debit Memo

Bank service
charge
In their notebooks, learners will do a survey with a bank account holder they know. They will ask
them the following questions.

1. Do you update your passbook regularly?

2. Do you ask for bank statement regularly?
3. Do you keep a personal record of your bank savings?
4. Have you experienced discrepancies in your bank account?
If yes, how were you able to solve them?
Prepare for sharing tomorrow