Professional Documents
Culture Documents
Debit money
Credit Over/Short
Credit Sales
- $14,356
- $66.00
- $14,290
E5-18
Bank reconciliation
Adjusted balance: $24,500
The following knowledge were accumulated to be used in adaptative the checking account
of Camela Co. for July:
a. money balance per the company's records at July thirty one, $24,010.
b. money balance per the statement at July thirty one, $22,750.
e. A check for $170 in payment of associate account was mistakenly recorded within the
registry as $710.
- Since $170 was recorded as $710, we tend to currently ought to add $540 to the corporate
money Records
i.e. $ 24,550
Camela Co.
Bank Reconciliation
July 31
$22,750
9,100
$31,850
Checks outstanding.
Adjusted Balance
7,350
$24,500
$24,010
540
50
Adjusted Balance
$24,500
Describe the nature of a bank account and its use in controlling cash.
A major reason that companies use bank accounts is for internal control. Some of the control
advantages of using bank accounts are as follows:
Bank Statement: Banks usually maintain a record of all checking account transactions. A summary of all
transactions, called a bank statement, is mailed, usually each month, to the company (depositor) or made
available online. The bank statement shows the beginning balance, additions, deductions, and the ending
balance. A typical bank statement is shown in Exhibit 4.
The company's records do not need to be updated for any items in the bank section of the reconciliation.
This section begins with the cash balance according to the bank statement. However, the bank should be
notified of any errors that need to be corrected.
The company's records do need to be updated for any items in the company section of the bank
reconciliation. For example, entries should be made for any unrecorded bank memos and any company
errors.
The effects of the adjustments on the accounts and financial statements of Colter Inc. based on the bank
reconciliation in Exhibit 6, are as follows: