1. Learning Outcomes Identify in both the cash book and the bank statement, the receipts and payments that appear in both. Identify in both the cash book and the bank statement, the receipts and payments that appear in both. Identify items that are unticked on the bank statement and enter them in the cash book. Identify items that are unticked on the bank statement and enter them in the cash book. Balance the bank columns of the cash book. Balance the bank columns of the cash book. Prepare a Bank Reconciliation Statement starting with the revised cash book balance. Prepare a Bank Reconciliation Statement starting with the revised cash book balance. Prepare a Bank Reconciliation Statement starting with the Bank Statement balance. Prepare a Bank Reconciliation Statement starting with the Bank Statement balance.

2. Bank Reconciliation Statement Bank Reconciliation Statements form a link between the balance at bank shown in the cash book and the balance shown on the bank statement received from the bank.

3. Reasons why the cash book and bank statement may differ – Timing Differences Unpresented Cheques – the time delay between writing out a cheque and recording it in the cash book, and the cheque being entered on the bank statement.

4. Reasons why the cash book and bank statement may differ – Timing Differences Outstanding Lodgements - Amounts paid into the bank, but not yet recorded on the bank statement.

5. Updating the Cash Book Receipts – standing order and BACS receipts (payments from Debtors), interest received. Receipts – standing order and BACS receipts (payments from Debtors), interest received. Payments – standing order and direct debit payments, bank charges. Payments – standing order and direct debit payments, bank charges.

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8. CASH BOOK (Bank Column Only) 1997 1 Feb 7 Feb 14 Feb 21 Feb 27 Feb 28 Feb 1 Mar Balances b/d A. Abbott Cash D. Richards Ltd. Cash P. Paul Ltd. Balance b/d 1340.50 208.50 500.00 162.30 500.00 262.30 1997 3 Feb 12 Feb 17 Feb 25 Feb 28 Feb Appleton Ltd. 123456 Rent 123457 D. Smith & Co. 123458 G. Christie 123459 Balance c/d 675.25 125.00 421.80 797.55 954.00 2973.60 954.00

9. Bank Statement DateParticularsPaymentsReceiptsBalance 1997 1 Feb 8 Feb 10 Feb 17 Feb 24 Feb 26 Feb 28 Feb Balance b/d Credit Cheque No. 123456 Credit Cheque No. 123457 Credit BACS credit : J. Jarvis Ltd Cheque No. 123458 Direct Debit : A-Z Finance Credit Bank Charges £ 675.25  125.00  421.80  150.00 10.00 £ 208.50  500.00  162.30  100.00 500.00  £ 1340.50 CR 1549.00 CR 873.75 CR 1373.75 CR 1248.75 CR 1411.05 CR 1511.05 CR 1089.25 CR 939.25 CR 1439.25 CR 1429.25 CR

10. Bank Statement DateParticularsPaymentsReceiptsBalance 1997 1 Feb 8 Feb 10 Feb 17 Feb 24 Feb 26 Feb 28 Feb Balance b/d Credit Cheque No. 123456 Credit Cheque No. 123457 Credit BACS credit : J. Jarvis Ltd Cheque No. 123458 Direct Debit : A-Z Finance Credit Bank Charges £ 675.25  125.00  421.80  150.00 10.00 £ 208.50  500.00  162.30  100.00 500.00  £ 1340.50 CR 1549.00 CR 873.75 CR 1373.75 CR 1248.75 CR 1411.05 CR 1511.05 CR 1089.25 CR 939.25 CR 1439.25 CR 1429.25 CR

11. CASH BOOK (Bank Column Only) 1997 1 Feb 7 Feb 14 Feb 21 Feb 27 Feb 28 Feb 1 Mar 24 Feb 1 Mar Balances b/d A. Abbott Cash D. Richards Ltd. Cash P. Paul Ltd. Balance b/d J. Jarvis Ltd. Balance b/d 1340.50  208.50  500.00  162.30  500.00  262.30 1997 3 Feb 12 Feb 17 Feb 25 Feb 28 Feb 26 Feb 28 Feb Appleton Ltd. 123456 Rent 123457 D. Smith & Co. 123458 G. Christie 123459 Balance c/d A-Z Finance Bank Charges Balance c/d 675.25  125.00  421.80  797.55 954.00 2973.60 954.00 100.00 150.00 10.00 894.00 1054.00 894.00

13. Severn Trading Company Bank Reconciliation Statement as at 29 th February 2997 Balance at Bank as per Bank Statement1429.25 Less: Unpresented Cheques G Christie – Cheque Number 123459797.55 631.70 Add:Outstanding Lodgements P Paul Ltd262.30 Balance at Bank as per Cash Book894.00