Escolar Documentos
Profissional Documentos
Cultura Documentos
BANKING
Module
Slideshow 12
Contents
Review of Bank Reconciliation Concepts
Banking 3
Bank Statement 4
Banking Terminology 6
Bank Reconciliation 7
Manual Bank Reconciliation 8
Bank Reconciliation Blueprint 9
Slideshow 12
Banking
Why do companies use a bank?
The reasons are: National Bank of Canada Account No.
1000-6168
900 McGill Road
Banks provide an effective Kamloops, B.C. V2C 5N3 Period
May 1, 2014 to
means of internal control of cash May 31, 2014
coming in and going out.
Enclosures Pages
10 1
Banks are used to clear
cheques received.
Payments are easier using
cheques and electronic means.
Remember, the banking
transactions of the company
should be separate from the
owner(s)s. (GAAP: Business Entity
Concept)
Overdraft (OD)
Your bank account is on OVERDRAFT (OD) if it has a negative
balance. Depending on the bank and the type of arrangement
you make with them, they will allow you to have a negative
balance and will not return cheques due to insufficient funds
(NSF) up to a certain amount. This is referred to as OVERDRAFT
PROTECTION.
Cleared
A banking item (e.g., a cheque) is cleared when the companys
bank has verified that there are funds that cover the item and
that the necessary entry is made on the companys bank
statement.
Bank Reconciliation
Why do you need to do bank
reconciliation?
The bank sends a bank statement to Bank Statement vs. Company Records
the company periodically. You should
be able to verify the balance on the
statement with the CASH IN BANK Company may need to Company may need to adjust
account in your General Ledger. make adjustments in the calculation of the cash
However, the balance between the the company records balance on the bank
companys accounting records and due to: statement to account for:
the cash balance on the bank
statement seldom match. For
example, there may be bank charges Bank charges/interest Outstanding cheques
unknown to the company, or the charges
Deposits in transit
company could have deposited an
NSF cheque from a customer. Interest earned
Bank errors
There could also be some deposits by NSF cheques
the company that are not reflected on
the bank statement. In other words, Companys bookkeeping
there could be a lot of bank-related errors
transactions that are not known by
either the bank or the company and
should therefore be reconciled in
order to come up with an adjusted Company cash account = Adjusted bank balance
cash balance. Study the summary at (Adjusted cash balance)
the right.
Click to continue.
Bank Reconciliation:
Manual System National Bank of Canada Account No.
1000-6168
900 McGill Road
It is best to understand the basic Kamloops, B.C. V2C 5N3 Period
May 1, 2014 to
concepts of bank reconciliation before May 31, 2014
completing it in Sage 50 Accounting. Enclosures Pages
First, print a General Ledger Report 10 1
(Select ALL) for the bank account for
the period.
Click.
Identify the items cleared by the bank
(blue lines across) as shown on the
bank statement and items that need to
be reconciled (Bank Charges and
Interest charges in this example). Bank
charges
The General Ledger Report will also
reveal if there are cheques that you
have issued but not yet cleared by the
bank (outstanding cheques) and
deposits that you have made that have
Interest
not been cleared (deposits in transit).
charges
You may also find errors in
bookkeeping, such as wrong amounts
entered either by you or by the bank.
Using these notes, do a manual
reconciliation a spreadsheet is best.
Click to continue.
Bank Reconciliation: Blueprint
Using the notes that you have made after comparing your G/L BANK account entries with your bank statement,
you are ready to do a manual bank reconciliation.
Click.
Study the blueprint of a bank reconciliation
Click to continue.
Bank Reconciliation (continued)
First, enter the balance per the bank
statement and the balance in the
company G/L BANK account.
Click.
Following the blueprint, add or Per Bank Statement 5,493.12
subtract from the balances. For
example, outstanding cheques are Less: Outstanding Cheques (620.00)
payments not yet cleared by the bank, Add: Deposits in Transit 3,230.00
so they decrease the bank balance.
You would therefore subtract them ADJUSTED BALANCE $8,103.12
from the bank statement balance. You
would do the opposite with deposits
in transit because they increase the
Per G/L BANK ACCOUNT 8,122.74
bank statement balance.
Click.
Less: Bank Charges (11.45)
You can then find the adjusted
Less: Bank interest (8.17)
balance for the bank statement and
your G/L BANK Account (adjusted ADJUSTED BALANCE $8,103.12
cash balance).
Click to continue.
Adjusted Cash Balance = $8,103.12
Bank Reconciliation (continued)
Remember, you need to balance your
G/L bank account with the reconciled
bank balance before you enter any Per G/L BANK ACCOUNT 8,122.74
adjustment journal entries.
Less: Bank Charges (11.45)
You may not journalize adjustments to
the bank records; you may adjust only Less: Bank interest (8.17)
our company books. At the right are
ADJUSTED BALANCE $8,103.12
the adjustments you need to make in
the company records as per the bank
reconciliation blueprint.
Click. Adjustment Journal Entry
These are the journal entries you
need to make to adjust Bank Charges Bank Charges 11.45
and the Bank Interest Charge. Interest Expense 8.17
You credit CASH because both Bank Cash 9.62
Charges and Interest Expense
decrease your cash in the bank.
Click to continue.
Bank Reconciliation (continued)
Click.
On the Expense tab, the linked
accounts Expense 1 (Bank Charges)
and Expense 3 (Interest Expense) you
specified earlier are automatically filled
in.
Click.
You would enter Bank Statement as
Source No., and enter the
corresponding amounts for BANK
CHARGES and INTEREST
EXPENSE.
Click.
Study the Account Reconciliation
Journal Entry after reconciling
expenses. Notice that the Unresolved
amount is equal to the last unresolved
item left (NSF cheque).
Click to continue.
Account Reconciliation in Sage 50
Accounting:
Step 4: Reconcile
Unresolved Items
Click.
To check your record, display the
Account Reconciliation Detail
Report. You will see the
outstanding cheque for $500.00.
Click to continue.
Account Reconciliation Reports:
General Ledger Report Step 1
CASH IN BANK
Click to continue.
Account Reconciliation Reports:
General Ledger Report Step 3
CASH IN BANK (continued)
Click to continue.
Account Reconciliation Reports:
General Ledger Report
BANK REC UNRESOLVED