Bank Reconciliation Statement Problems and Solutions

It is however possible to outsource the task to a bookkeeper or accountant. If you have difficulty answering the following questions, read our In-Depth Explanation for this topic. Rose then enters the amounts into the Reconciliation section of the worksheet. This list will help you decide if you should adjust the Cashbook or use a Bank Reconciliation Worksheet or to do both.

Highlighting missing or different transactions

• If your reconciliation doesn’t balance, adjust the records to account for any missing data.
• This document contains three bank reconciliation exercises.
• Here is a free printable list of bank abbreviations and codes that can be found on bank statements.

Check received from customers amounting to Rs. 75,850 deposited and properly accounted for in the cash book was not credited by bank. Check issued totaling Rs. 115,250 recorded in cash book but not appeared in the bank statement. Prepare the bank reconciliation statement as on 30 June 2013 to arrive the balance as per pass book. In this blog, we will introduce you to some real-life bank reconciliation examples as well as the major roadblocks faced by organizations while reconciling their bank statements. In this simple process of tallying the cash book and bank statement, there could be multiple errors. These errors or bank reconciliation problems might differ based on the size of the organization.

Bank Reconciliation Exercises and Answers: Step-By-Step Tutorial Exercise

The second exercise reconciles a bank balance of $573,000 to a book balance of $573,000 using cash receipts, deposits, outstanding checks and deposits in transit. The third exercise reconciles a bank balance of $199,875 to a book balance of $199,875 using bank reconciliation exercise and answers beginning balances, deposits, outstanding checks, deposits in transit and errors. Journal entries are provided to record a note payable and bank service charges.

Step 1: Prepare the Bank Side of the Reconciliation

The adjusted bank balance is $11,000 and the adjusted book balance is $9,470. Let’s assume there was a deposit of $1,500 that was incorrectly recorded as $1,530. There is a difference in the balance as on 31st March 2019 between the bank statement and Cash Book. You are required to prepare a Bank Reconciliation Statement as on 31st March 2019.

JPN & Co, has a balance of $20,000 as per passbook as on 31st march 2021. Charged commission on collection of outstation check by bank of worth Rs. 800. Check the final figures on your bank reconciliation document against your general ledger totals and ensure they match. Calculate the difference between your bank statement ending balance and your general ledger total. Your bank statement should properly reflect the difference.

Harold Averkamp (CPA, MBA) has worked as a university accounting instructor, accountant, and consultant for more than 25 years. He is the sole author of all the materials on AccountingCoach.com. The most common documents would be the bank statement that is received from the bank and the check register for the month. In the accounting industry, most check registers are printed off of accounting software and used for the reconciliation. The most crucial step in reconciling accounts is ensuring that the ending balances on both the bank statement and the company’s records match. This involves meticulously comparing each transaction recorded by the company with those on the bank statement, addressing any discrepancies.

Control Accounts

From the following particulars prepare a Bank Reconciliation Statement to find out the causes of difference in two balances as on August 31st, 2016 for Four Star (Pvt.) Ltd. All names of people and businesses in these exercises are fictitious and made up from my imagination. They do not depict real names, businesses or places known by me. The Expected Bank Statement Balance of $2,441.50 is the closing Bank Statement balance so it is good and correct. At this stage Rose could also go back to the Bank Statement and tick off the highlighted transactions to show that they have now all been dealt with.

Cashbook for visa

The cashbook is a pre-printed book from the stationery shop. Rose just writes down her transactions into it when she remembers. This is not an exhaustive list but it will familiarize you with how banks use abbreviations to identify each type of transaction on a bank statement. Bob found that a bank charge for $37 had not been recorded in the cash book, and also that a cheque he had written to a supplier for $112 had not yet been debited by the bank. How to fix the problem depends on whether you are using book-keeping software or keeping a manual cash book. Below are suggestions for both, but first, you need to find out what caused the problem in the first place.

Bank Reconciliation Exercises and Answers

For items 4-15, select the action necessary to reconcile the bank statement. For the past 52 years, Harold Averkamp (CPA, MBA) has worked as an accounting supervisor, manager, consultant, university instructor, and innovator in teaching accounting online. The debit side of the cash book had been undercast by Rs. 300. Here is the image of the Cashbook for the Visa Credit Card which Rose started half way through her pre-printed Cashbook (rather than paying for a whole separate Cashbook from the stationers).

Below is the extract for the Cash Book and Bank statement for the month of March 2019. The bank column in Arthur’s cash book showed a debit balance of $5167. Arthur discovered the following when he compared his cash book with his bank statement. A check for Rs. 210 by the customer having been deposited into bank was dishonored by the bankA check was credited twice in Cash Book for worth Rs. 3,000.

• If you deal with purely modern online banking and do not issue or receive checks/cheques, you will not have to use a Bank Reconciliation Template.
• Outstanding Deposits-Outstanding deposits are payments you receive into your Cashbook on say the last few days of the month, but which you don’t drop off at the bank until say the first day of the next month.
• At this stage Rose could also go back to the Bank Statement and tick off the highlighted transactions to show that they have now all been dealt with.
• However, the balance as per cash book as on 31st march 2021 is  $2210.
• If you have already found the problem you can skip this part.

Financial Statements for Clubs & Societies

If you have already found the problem you can skip this part. Okay, here are some exercises on bank reconciliation, along with solutions and explanations. Sometimes it will only be necessary to process just the first step, or just the second step, depending on what transactions are missing or wrong.