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Chapter 10.1
Bank Reconciliation
• Write the heading
Chapter 10.1
Bank Reconciliation
• Enter the ending balance from the bank statement
Chapter 10.1
Bank Reconciliation
• Determine, record, and total the outstanding cheques
Chapter 10.1
Bank Reconciliation
• When cashed, the outstanding cheques will lower the bank balance
Chapter 10.1
Bank Reconciliation
• Add a late deposit, if one exists
Chapter 10.1
Bank Reconciliation
• Compute the adjusted amount of the bank statement’s balance
Chapter 10.1
Bank Reconciliation
• Record the balance of cash from the company’s ledger account
Chapter 10.1
Bank Reconciliation
• Deduct any “debit memos” discovered on the bank statement
Chapter 10.1
Bank Reconciliation
• Calculate the new cash balance
Chapter 10.1
Bank Reconciliation
• Often, these two amounts will agree. If not, look for credit memos and errors.
Chapter 10.1
Bank Reconciliation
• In this case, a journalizing error was discovered. It had the effect of increasing the ledger balance of cash
Chapter 10.1
Bank Reconciliation
• Calculate the adjusted ledger account balance of cash
Chapter 10.1
Bank Reconciliation
• Making changes on this statement will not affect the company’s ledger account balance of $1121.76
Chapter 10.1
Bank Reconciliation
• Journal entries are needed to change the company’s ledger account balance from $1,121.76 to $1,118.36.
