22-23 5.01 Bank Rec. Lesson

Bank Reconciliation

5.01 Bank charges, outstanding deposits & checks

• Bank Statement

• Bank Statement Reconciliation

• Bank Service Charge

• Check Stub Recording Charges

• Outstanding Deposits

• Outstanding Checks

• Journalize Bank Charge

​

New Terms

​

​

Steps to Reconcile a Bank Statement

Adjusted Checkbook Balance (Left Side)

1~Write Date

2~Record Checkbook balance

3~Subtract bank service charges

4~Write an adjusted checkbook balance

Adjusted Bank Balance (Right Side)

1~Write Date

2~Record ending bank statement balance

3~Add Outstanding Deposits

4~Subtotal

5~Subtract Outstanding Checks

6~Write adjusted bank balance

11~Compare adjusted balances (MUST EQUAL)

Multiple Choice

On December 6 of the current year, American Everlasting received a bank statement dated November 30. Review the information obtained from the bank statement and the check stub. Based on the information provided what is the adjusted bank balance?

• $4,689.00

• $6,285.00

• $4,707.00

• $4,695.00

​

Multiple Choice

Based on this information, choose the journal entry to record the bank service charge.

• Debit Transaction Fee, $6.00; Credit Cash, $6.00

• Debit Miscellaneous Expense, $6.00; Credit Cash $6.00

• Debit Cash, $6.00; Credit Misellaneous Expense, $6.00

• Debit Cash, $6.00; Credit Transaction Fee, $6.00

Multiple Choice

Assuming the bank balance is accurate, does the bank statement reconcile?

• No, the adjusted checkbook balance is $12.25 too high.

• No, the adjusted checkbook balance is $53.75 too low.

• Yes, the adjusted checkbook balance and adjusted bank balance agree.

• Yes, the adjusted checkbook balance is more than the adjusted bank balance.

​

Key Point: ​Bank is correct but they still do not know about outstanding events!

​