Prepare Bank Reconciliation Statement to find out adjusted balances in both books of Zakirullah Traders on June 30th, 2015?
a. Unfavorable balance as per Bank Statement Rs. 55,000, while cash book credit balance of Rs. 47,100.
b. Mark-up charged by bank Rs. 600.
c. Check of customer Basher & Company for Rs. 3,500 was dishonored and returned by bank.
d. Dividend collected by bank not recorded in the cash book amounted to Rs. 2,000.
e. Checks issued amounted to Rs. 10,000 but presented to bank for payment worth Rs. 5,800.
f. A checks deposited into the bank of worth Rs. 30,000 but Rs. 10,000 check was not collected by bank.
Ms. Fiza Naseem works as a cashier for Pine & Co. Abbottabad. Her responsibilities include entering and maintaining the firm’s cash book and preparing a bank reconciliation statement at the end of each month. The firm’s cash book for July 2016 which she has just finished entering and balancing for the month end is shown below (Note: for the sake of clarity the cash and discount columns have been omitted from cash book.) A copy of the firm’s bank statement from the Star Bank Limited dated 31st July 2016 has just been received and is also illustrated. The numerical difference between the two is; Bank statement Rs. 903.00 minus cash book Rs. 641.70 = Rs. 261.30
This is the difference which Fiza will have to ‘reconcile:
A debit balance of Rs. 14,065 appeared in the cash book of Uzair Nawaz & Co. as on March 31st, 2017 whereas the Bank Statement showed a credit balance of Rs. 27,380 as on that date. Following discrepancies were noted:
a. Check amounting to Rs. 9,977 had been sent to suppliers and entered in the cash book during March, but had not yet been presented to the Bank.
b. A check for Rs. 2,077 was issued by the company for purchase of merchandise and was paid by the bank but not recorded in company’s book.
c. Bank deposit of March 30, for Rs. 1,570 was not shown in Bank Statement.
d. Dividend collections amounting to Rs. 7,000 were credited by bank but these were not recorded in the cash book.
e. Bank services charges for March amounting to Rs. 60 were debited by the bank but these were not recorded in the cash book.
f. The bank debited Rs. 345 for insurance premium paid on March 28, on behalf of company, but it was recorded by company as Rs. 480.
g. A check for Rs. 890 of Asif, a customer, which had been deposited in the bank incorrectly recorded in the cash book as Rs. 980.
>>> Practice Bank Reconciliation Statement Format.
Mukharji, A., & Hanif, M. (2003). Financial Accounting (Vol. 1). New Delhi: Tata McGraw-Hill Publishing Co.
Narayanswami, R. (2008). Financial Accounting: A Managerial Perspective. (3rd, Ed.) New Delhi: Prentice Hall of India.
Ramchandran, N., & Kakani, R. K. (2007). Financial Accounting for Management. (2nd, Ed.) New Delhi: Tata McGraw Hill.