Scribd
Upload
124 views4 pages

Gerald N. Roman Bsba FM 2-C Financial Analysis and Reporting

This document contains questions and answers about bank reconciliation concepts such as book debits and credits, bank debits and credits, formulas for computing balances, deposits in transit, outstanding checks, and a proof of cash. It also includes an example bank reconciliation for July 1 and July 31 showing balances per book and bank, deposits in transit, outstanding checks, and adjusting entries to reconcile the accounts.

Uploaded by

Gerald Noveda Roman
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
124 views4 pages

Gerald N. Roman Bsba FM 2-C Financial Analysis and Reporting

This document contains questions and answers about bank reconciliation concepts such as book debits and credits, bank debits and credits, formulas for computing balances, deposits in transit, outstanding checks, and a proof of cash. It also includes an example bank reconciliation for July 1 and July 31 showing balances per book and bank, deposits in transit, outstanding checks, and adjusting entries to reconcile the accounts.

Uploaded by

Gerald Noveda Roman
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 4

GERALD N.

ROMAN

BSBA FM 2-C

FINANCIAL ANALYSIS AND REPORTING

Assessment Tasks / Output (ATOs) QUESTIONS

QUESTIONS

1. What is a two-date bank reconciliation?

- A two-date reconciliation becomes complicated only when certain facts or data are omitted, hence the
necessity for computing them.

2. Explain book debits.

- Book debits refer to cash receipts or all items debited to the cash in bank account.

3. Explain book credits.

- Book credits refer to cash disbursements or all items credited to the cash in bank account.

4. Explain bank debits.

- Bank debits refer to all items debited to the account of the depositor which include checks paid by
bank and debit memos. In the absence of any statement to the contrary, bank debits are assumed to be
checks paid by bank.

5. Explain bank credits.

- Bank credits refer to all items credited to the account of the depositor which include deposits
acknowledged by bank and credit memos. In the absence of any statement to the contrary, bank credits
are assumed to be deposits acknowledged by bank.

6. What is the formula in the computation of balance per book?

- Computation of book balance


Balance per book-beginning of month xx
Add: Book debits during the month xx
Total xx
Less: Book credits during the month xx
Balance per book-end of month xx
7. What is the formula in the computation of balance per bank?

- Balance per bank-beginning of month xx


Add: Bank credits during the month xx
Total xx
Less: Bank debits during the month xx
Balance per bank-end of month xx

8. What is the formula in the computation of deposits in transit?

- Deposits in transit – beginning of month xx


Add: Cash receipts deposited during the month xx
Total deposits to be acknowledged by bank xx

Less: Deposits acknowledged by bank during month xx

Deposits in transit - end of month xx

9. What is the formula in the computation of outstanding checks?

- Outstanding checks- beginning of month xx


Add: Checks drawn by depositor during the month xx

Total checks to be paid by bank xx


Less: Checks paid by bank during the month xx

Outstanding checks- end of month xx

10. What is a proof of cash?


-A proof of cash is an expanded reconciliation in that it includes proof of receipts and disbursements.
This approach may be useful in discovering possible discrepancies in handling cash particularly when
cash receipts have been recorded but have not been deposited.
Bank Reconciliation

July 1

Balance per book ₱ 1,270,000

Balance per bank ₱ 1,720,000


Deposit in transit ₱ 500,000
Outstanding checks ₱ (950,000)
Adjusted Bank balances: ₱ 1,270,000

July 31

Balance per book ₱ 470,000


Credit memos ₱ 1,500,000
Debit memos ₱ (20,000)
Adjusted book balance: ₱ 1,950,000

Balance per bank ₱ 2,700,000


Deposit in transit ₱ 400,000
Outstanding checks ₱ (1,150,000)
Adjusted bank balance: ₱ 1,950,000

Preparation of Adjusting Entries


Month Ended July 31
On the book fabulous Company

Particulars Debit Credit

Cash in bank 1,500,000


Notes Receivable 1,500,000
To record note collected by the bank

Service Charge 20,000


Cash in Bank 20,000
To record bank service charge
Total 1,520,000 1,520,000
Preparation of Adjusting Entries
Month Ended July 31
On the bank

Check number Particulars Debit Credit


Cash in bank 400,000
Accounts receivable 400,000
To record accounts receivable
107 Accounts payable 650,000
Cash in bank 650,000
To record checks drawn
108 Accounts payable 500,000
Cash in bank 500,000
To record checks drawn
Total 1,550,000 1,550,000

You might also like