BANK STATEMENTS ACCOUNT W. A. LEE COMPANYStatement Date/Credit STATEMENT 500 QUEEN STREETLine Closing Date FREDERICTON, NB, E3B 5C2April 30, 2003 457923.

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Presentation transcript:

BANK STATEMENTS ACCOUNT W. A. LEE COMPANYStatement Date/Credit STATEMENT 500 QUEEN STREETLine Closing Date FREDERICTON, NB, E3B 5C2April 30, ACCOUNT NUMBER Balance Deposits and CreditsCheques and Debits Balance Last Statement No.Total Amount This Statement 13, , , , DEPOSITS AND CHEQUES AND DEBITSCREDITSDAILY BALANCE DateNo.AmountDateAmountDateAmount , , , , , , , , , , , , , CM1, , , , , , , , , , ============================================ 4-29NSF , , , , , DM , , Symbols:CMCredit MemoECError CorrectionNSFNot Sufficient FundsReconcile Your DMDebit MemoINTInterest EarnedSCService ChargeAccount Promptly A bank statement shows: 1. cheques paid and other debits charged against the account 2. deposits and other credits made to the account 3. account balance after each day’s transactions A bank statement shows: 1. cheques paid and other debits charged against the account 2. deposits and other credits made to the account 3. account balance after each day’s transactions

RECONCILING THE BANK ACCOUNT Reconciliation is necessary because the balance per bank and balance per books are seldom in agreement due to time lags and errors. A bank reconciliation should be prepared by an employee who has no other responsibilities pertaining to cash.

Terms Deposits in transit Deposits recorded by depositor that have not been recorded by bank Outstanding cheques Cheques written (issued) and recorded by company that have not been presented to/paid by bank Adjusted balance Reconciled or correct cash balance

Terms Debit memoranda Charges against depositor’s account (e.g. service charges, RC (returned)/NSF (insufficient funds) cheques) Credit memoranda Amounts that increase depositor’s account (e.g., interest earned)

Bank Reconciliation Procedures $ Per Bank Statement -outstanding cheques +deposits in transit +/- bank errors = correct cash amount $ Per Books -NSF cheques -cheque printing or other service charges +notes collected by bank +/- book errors = correct cash amount Illustration 8-11

Reconciling Journal Entries Books Each reconciling item in determining the adjusted balance per books MUST be journalized and posted Bank Do NOT journalize any entries on bank side