1. LESSON 5-2 Bank Reconciliation
4/23/2017
LESSON 5-2
Bank Reconciliation
Original created by M.C. McLaughlin, Thomson/South-Western
Modified by Deborah L. Burns, Johnston County Schools, West Johnston High School
GREEN

2. BANK STATEMENT
page 124
A report of deposits, withdrawals, and bank balances sent to a depositor by a bank is called a bank statement
The bank stamps the checks to indicate the checks are canceled & are not to be transferred further
Canceled checks may be returned to a depositor with a bank statement or may be kept on record by the bank
LESSON 5-2

3. BANK RECONCILIATION ADJUSTMENTS
page 124
A bank’s records & a depositor’s records may differ for several reasons:
A service charge may not have been recorded in the depositor’s business records
Outstanding deposits may be recorded in the depositor’s records but not on a bank statement
Outstanding checks may be recorded in the depositor’s records but not on a bank statement
A depositor may have made math or recording errors
LESSON 5-2

4. BANK STATEMENT RECONCILIATION
A bank statement is reconciled by verifying that information on a bank statement & a checkbook are in agreement
Reconciling immediately after receiving the statement is an important aspect of cash control
Look for differences between what’s on the books and what’s on the statement
LESSON 5-2

5. BANK STATEMENT RECONCILIATION
page 125
1. Date 1
2. Check Stub Balance 2 5
3. Service Charge
4. Adjusted Check Stub Balance 6 3 7
5. Bank Statement Balance
6. Outstanding Deposits 8 4 9
7. Subtotal
8. Outstanding Checks 10
9. Adjusted Bank Balance
10. Compare Adjusted Balances
LESSON 5-2

6. RECORDING A BANK SERVICE CHARGE ON A CHECK STUB
page 126
Although the business does not write a check for a bank service charge, this cash payment must be recorded in the accounting records as a cash payment
A record of a bank service charge is made on a check stub
LESSON 5-2

7. RECORDING A BANK SERVICE CHARGE ON A CHECK STUB
page 126
1. Write Service Charge $8.00 on the check stub under the heading “Other.”
2. Write the amount of the service charge in the amount column.
3. Calculate and record the new subtotal on the Subtotal line. 1 2 3
LESSON 5-2

8. JOURNALIZING A BANK SERVICE CHARGE
page 127
Because the bank service charge is a cash payment for which no check is written, a memorandum is prepared as the source document
Since service charges are relatively small & occur only once a month they are recorded as a miscellaneous expense
LESSON 5-2

9. JOURNALIZING A BANK SERVICE CHARGE
page 127
August 31. Received bank statement showing August bank service charge, $8.00. Memorandum No. 3. 2 1 4 3
1. Write the date.
2. Write the title of the account debited. Record the debit amount.
3. Write the title of the account credited. Record the credit amount.
4. Write the source document number in the Doc. No. column.
LESSON 5-2

10. TERM REVIEW
page 128
bank statement
LESSON 5-2