Professional Documents
Culture Documents
PROOF OF CASH
TODAYS OBJECTIVES
Pre-Test students knowledge in bank reconciliation and proof of cash
Define bank reconciliation
Identify the bank reconciling items and book reconciling items
Classify type of errors in bank reconciliation
Identify the methods used in bank reconciliation
Solve bank reconciliation problems
Prepare a proof of cash
MINI QUIZ
BOWL
BANK RECONCILIATION AND
PROOF OF CASH
Q1
A BANK RECONCILIATION IS
a) A formal financial statement that lists all of the bank account balances
of an entity.
b) A merger of two banks that previously were competitors.
c) A statement sent by the bank to depositor on a monthly basis.
d) A schedule that accounts for the differences between an entitys cash
balance as shown in the bank statement and the cash balance shown
in the general ledger.
Q1
A BANK RECONCILIATION IS
a) A formal financial statement that lists all of the bank account balances
of an entity.
b) A merger of two banks that previously were competitors.
c) A statement sent by the bank to depositor on a monthly basis.
d) A schedule that accounts for the differences between an entitys cash
balance as shown in the bank statement and the cash balance shown
in the general ledger.
A
A bank
bank reconciliation
reconciliation is
is prepared periodically to
explain the
the difference
difference between
between cash reported on the
bank
bank statement
statement and
and the
the cash balance on companys
companys
books.
GENERAL LEDGER
Account:
Date
May
31
Cash
Item
Balance
Acct. No.
PR
Debit
Credit
102
Balance
DR (CR)
2,481.18
Q2
BANK STATEMENTS PROVIDE INFORMATION
ABOUT ALL OF THE FOLLOWING, EXCEPT
a)Checks cleared during the period
b)NSF Checks
c)Errors made by the depositor
d)Bank charges for the period
Q2
BANK STATEMENTS PROVIDE INFORMATION
ABOUT ALL OF THE FOLLOWING, EXCEPT
a)Checks cleared during the period
b)NSF Checks
c)Errors made by the depositor
d)Bank charges for the period
Q3
WHICH IS NOT A BOOK RECONCILING ITEM?
Q3
WHICH IS NOT A BOOK RECONCILING ITEM?
Q4
WHICH IS NOT A BANK RECONCILING ITEM?
a) Outstanding Checks
b) NSF Customer Checks
c)Deposits in Transit
d) Bank Errors
Q4
WHICH IS NOT A BANK RECONCILING ITEM?
a) Outstanding Checks
b) NSF Customer Checks
c)Deposits in Transit
d) Bank Errors
A
A bank
bank reconciliation
reconciliation is
is prepared periodically to
explain the
the difference
difference between
between cash reported on the
bank
bank statement
statement and
and the
the cash balance on companys
companys
books.
Why
Why are
are the
the
balances
balances different?
different?
GENERAL LEDGER
Account:
Date
May
31
Cash
Item
Balance
Acct. No.
PR
Debit
Credit
102
Balance
DR (CR)
2,481.18
RECONCILING ITEMS
Bank
Bank Statement
Statement
Balance
Balance
Add:
Add:
Deposits
Deposits in
in transit.
transit.
Deduct:
Deduct:
Outstanding
Outstanding Checks
Checks
Add
Add or
or Deduct:
Deduct: Bank
Bank
errors.
errors.
Book
Book Balance
Balance
Add:
Add: Collections
Collections
made
made by
by the
the bank.
bank.
Add:
Add: Interest
Interest earned
earned
on
on checking
checking account.
account.
Deduct:
Deduct:
Nonsufficient
Nonsufficient funds
funds
check
check (NSF).
(NSF).
Deduct:
Deduct: Bank
Bank
service
service charge.
charge.
Add
Add or
or Deduct:
Deduct:
Book
Book errors.
errors.
Q5
THREE FORMS OF BANK
RECONCILIATION ARE THE
FOLLOWING EXCEPT
a)Book to Bank Method
b)Bank to Ledger Method
c)Adjusted Balance Method
d)Bank to Book Method
Q5
THREE FORMS OF BANK
RECONCILIATION ARE THE
FOLLOWING EXCEPT
a)Book to Bank Method
b)Bank to Ledger Method
c)Adjusted Balance Method
d)Bank to Book Method
Book Balance
Add or deduct
Bank Reconciling
Items
Add or deduct
Book Reconciling
Items
Adjusted
Balance
Adjusted
Balance
Book to Bank
Method
Book Balance
Add or deduct
Book
Reconciling
Items
Adjusted
Balance
Add or deduct
Bank
Reconciling
Bank to Book
Method
Bank Balance
Add or deduct
Bank
Reconciling
Items
Adjusted
Balance
Add or deduct
Book
Reconciling
Q6
IN PREPARING A MONTHLY BANK RECONCILIATION, WHICH OF
THE FOLLOWING WOULD BE ADDED TO THE BALANCE PER
BANK STATEMENT TO ARRIVE AT THE CORRECT CASH BALANCE?
a)Outstanding Check
b)Bank Service Charge
c)Deposit in Transit
d)A customers Note Collected by the Bank on Behalf of
the depositor
Q6
IN PREPARING A MONTHLY BANK RECONCILIATION, WHICH OF
THE FOLLOWING WOULD BE ADDED TO THE BALANCE PER
BANK STATEMENT TO ARRIVE AT THE CORRECT CASH BALANCE?
a)Outstanding Check
b)Bank Service Charge
c)Deposit in Transit
d)A customers Note Collected by the Bank on Behalf of
the depositor
Q7
IN PREPARING A MONTHLY BANK RECONCILIATION, WHICH OF
THE FOLLOWING WOULD BE ADDED TO THE BALANCE PER
BOOK STATEMENT TO ARRIVE AT THE CORRECT CASH BALANCE?
a)Outstanding Check
b)Bank Service Charge
c)Nonsufficient Fund Check
d)A customers Note Collected by the Bank on Behalf of
the depositor
Q7
IN PREPARING A MONTHLY BANK RECONCILIATION, WHICH OF
THE FOLLOWING WOULD BE ADDED TO THE BALANCE PER
BOOK STATEMENT TO ARRIVE AT THE CORRECT CASH BALANCE?
a)Outstanding Check
b)Bank Service Charge
c)Nonsufficient Fund Check
d)A customers Note Collected by the Bank on
Behalf of the depositor
Q8
IN PREPARING A MONTHLY BANK RECONCILIATION, WHICH OF
THE FOLLOWING WOULD BE DEDUCTED TO THE BALANCE PER
BANK STATEMENT TO ARRIVE AT THE CORRECT CASH BALANCE?
a)Outstanding Check
b)Bank Service Charge
c)Nonsufficient Fund Check
d)Errors made by the depositor
Q8
IN PREPARING A MONTHLY BANK RECONCILIATION, WHICH OF
THE FOLLOWING WOULD BE DEDUCTED TO THE BALANCE PER
BANK STATEMENT TO ARRIVE AT THE CORRECT CASH BALANCE?
a)Outstanding Check
b)Bank Service Charge
c)Nonsufficient Fund Check
d)Errors made by the depositor
Q9
IN PREPARING A MONTHLY BANK RECONCILIATION, WHICH OF
THE FOLLOWING WOULD BE DEDUCTED TO THE BALANCE PER
BOOK STATEMENT TO ARRIVE AT THE CORRECT CASH BALANCE?
a)Outstanding Check
b)A customers Note Collected by the Bank on Behalf of
the depositor
c)Nonsufficient Fund Check
d)Errors made by the bank
Q9
IN PREPARING A MONTHLY BANK RECONCILIATION, WHICH OF
THE FOLLOWING WOULD BE DEDUCTED TO THE BALANCE PER
BOOK STATEMENT TO ARRIVE AT THE CORRECT CASH BALANCE?
a)Outstanding Check
b)A customers Note Collected by the Bank on Behalf of
the depositor
c)Nonsufficient Fund Check
d)Errors made by the bank
RECONCILING ITEMS
Bank
Bank Statement
Statement
Balance
Balance
Add:
Add:
Deposits
Deposits in
in transit.
transit.
Deduct:
Deduct:
Outstanding
Outstanding Checks
Checks
Add
Add or
or Deduct:
Deduct: Bank
Bank
errors.
errors.
Book
Book Balance
Balance
Add:
Add: Collections
Collections
made
made by
by the
the bank.
bank.
Add:
Add: Interest
Interest earned
earned
on
on checking
checking account.
account.
Deduct:
Deduct:
Nonsufficient
Nonsufficient funds
funds
check
check (NSF).
(NSF).
Deduct:
Deduct: Bank
Bank
service
service charge.
charge.
Add
Add or
or Deduct:
Deduct:
Book
Book errors.
errors.
SIMMONS
SIMMONS COMPANY
COMPANY HAS
HAS THE
THE FOLLOWING
FOLLOWING INFORMATION
INFORMATION
THE
THE JULY
JULY 31
31 BANK
BANK STATEMENT
STATEMENT INDICATED
INDICATED A
A BALANCE
BALANCE OF
OF P9,610.
P9,610.
THE
CASH
GENERAL
LEDGER
ACCOUNT
ON
THAT
DATE
SHOWS
THE CASH GENERAL LEDGER ACCOUNT ON THAT DATE SHOWS A
A BALANCE
BALANCE OF
OF
OUTSTANDING
OUTSTANDING CHECKS
CHECKS TOTALED
TOTALED P2,417.
P2,417.
A
A P500
P500 CHECK
CHECK MAILED
MAILED TO
TO THE
THE BANK
BANK FOR
FOR DEPOSIT
DEPOSIT HAD
HAD NOT
NOT REACHED
REACHED THE
THE BANK
BANK AT
AT THE
THE
STATEMENT
STATEMENT DATE.
DATE.
THE
THE BANK
BANK RETURNED
RETURNED A
A CUSTOMERS
CUSTOMERS NSF
NSF CHECK
CHECK FOR
FOR P225
P225 RECEIVED
RECEIVED AS
AS PAYMENT
PAYMENT ON
ON ACCOUNT
ACCOUNT
RECEIVABLE.
RECEIVABLE.
THE
THE BANK
BANK STATEMENT
STATEMENT SHOWED
SHOWED 30
30 INTEREST
INTEREST EARNED
EARNED DURING
DURING JULY.
JULY.
CHECK
CHECK NO.
NO. 781
781 FOR
FOR SUPPLIES
SUPPLIES EXPENSE
EXPENSE CLEARED
CLEARED THE
THE BANK
BANK FOR
FOR P268
P268 BUT
BUT WAS
WAS ERRONEOUSLY
ERRONEOUSLY
RECORDED
RECORDED IN
IN OUR
OUR BOOKS
BOOKS AS
AS P240.
P240.
A
A P486
P486 DEPOSIT
DEPOSIT BY
BY ACME
ACME COMPANY
COMPANY WAS
WAS ERRONEOUSLY
ERRONEOUSLY CREDITED
CREDITED TO
TO OUR
OUR ACCOUNT
ACCOUNT BY
BY THE
THE BANK
BANK..