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Chapter 9 – Accounting for Cash | DRAFT | Accounting 1, 7th Edition1
Chapter 9Accounting for Cash
Ch9
Chapter 9 – Accounting for Cash | DRAFT | Accounting 1, 7th Edition2
Bank Reconciliation
This tutorial guides you through the steps of bank reconciliation.
For more detailed instructions, refer to Section 9.3 of the Accounting 1 textbook.
Chapter 9 – Accounting for Cash | DRAFT | Accounting 1, 7th Edition3
Bank Reconciliation
Write the header: Who, What, When.
Chapter 9 – Accounting for Cash | DRAFT | Accounting 1, 7th Edition4
Bank Reconciliation
Enter the ending balance from the bank statement.
Chapter 9 – Accounting for Cash | DRAFT | Accounting 1, 7th Edition5
Bank Reconciliation
Determine, record, and total the amount of the outstanding cheques.
Chapter 9 – Accounting for Cash | DRAFT | Accounting 1, 7th Edition6
Bank Reconciliation
When cashed, the outstanding cheques will lower the bank balance.
Chapter 9 – Accounting for Cash | DRAFT | Accounting 1, 7th Edition7
Bank Reconciliation
Add any late deposits, if they exist.
Chapter 9 – Accounting for Cash | DRAFT | Accounting 1, 7th Edition8
Bank Reconciliation
Calculate the adjusted amount of the bank statement’s balance.
Chapter 9 – Accounting for Cash | DRAFT | Accounting 1, 7th Edition9
Bank Reconciliation
Record the balance of cash from the company’s ledger account.
Chapter 9 – Accounting for Cash | DRAFT | Accounting 1, 7th Edition10
Bank Reconciliation
Deduct any Debit memos discovered on the bank statement.
Chapter 9 – Accounting for Cash | DRAFT | Accounting 1, 7th Edition11
Bank Reconciliation
Calculate the new cash balance.
Chapter 9 – Accounting for Cash | DRAFT | Accounting 1, 7th Edition12
Bank Reconciliation
Often, these two amounts will not match. If not, look for credit memos or errors.
Chapter 9 – Accounting for Cash | DRAFT | Accounting 1, 7th Edition13
Bank Reconciliation
In this case, a journalizing error was discovered. It had the effect of increasing the ledger balance of cash.
Chapter 9 – Accounting for Cash | DRAFT | Accounting 1, 7th Edition14
Bank Reconciliation
Calculate the adjusted ledger account balance of cash.
Chapter 9 – Accounting for Cash | DRAFT | Accounting 1, 7th Edition15
Bank Reconciliation
The two adjusted balances agree. Bank reconciliation is almost complete.
Chapter 9 – Accounting for Cash | DRAFT | Accounting 1, 7th Edition16
Bank Reconciliation
Making changes on this statement will not effect the company’s ledger account balance of $1 121.76 (incorrect due to the journalizing error).
Chapter 9 – Accounting for Cash | DRAFT | Accounting 1, 7th Edition17
Bank Reconciliation
Journal entries are needed to correct the journalizing error and change the company’s ledger account from $1 121.76 to $1 118.36
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