Bank Reconciliation Problems: Accounting Assignment – Chapter 4, Week 2

Summary

Bank reconciliation is a process in accounting. It matches the cash balance on a company's bank statement with the amount in its own accounting records.

Bank Reconciliation Statement

A bank reconciliation statement lists all the items that cause the bank balance to differ from the book balance. It then adjusts the book balance to match the bank balance. It is for Superior Auto Supply, Inc. for May 31, 2012.

Unadjusted Bank Balance

The unadjusted bank balance is the amount shown on the bank statement. It does not include deposits in transit or outstanding checks. It does not include bank errors.

Unadjusted Book Balance

The unadjusted book balance is the amount shown in the company's accounting records. It does not include errors in recording payments. It does not include bank service charges or collection fees.

Reconciling Items

Reconciling items are the differences between the bank balance and the book balance. Some of these items need to be added or subtracted to adjust the book balance. Some do not.

Key terms

Bank reconciliation

The process of matching the cash balance on a company's bank statement with the amount in its own accounting records.

Deposits in transit

Deposits made by the company that have not yet been processed by the bank.

Outstanding checks

Checks written by the company that have not yet been cashed or cleared by the bank.

Bank error

A mistake made by the bank in recording transactions.

Bank service charge

A fee charged by the bank for providing services to the company.

NSF checks

Checks that are returned by the bank because there are not enough funds in the account to cover them.

Questions this document helps with

• What are deposits in transit?
• How do you find the true cash balance?
• What are outstanding checks?

Summary written with AI from the document's text.