fac1502 bank reconcilliation notes
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MENU LIST
• INTRODUCTION
• BANK RECON
•
GOLDEN RULES• MUST DO EXERCISE
• SELF ASSESSMENT CHECK-LIST
• INSPIRATIONAL POEM
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INTRODUCTION
Dear Honourable Members
Just a reminder the first assignment is due on the 30th March2016. Make sure you submit on time.
I have prepared notes on Bank Recon as well as selected MUST
do previous exam question papers. Go through the notes and ifyou require my assistance let me know.
Kind regards
Mr. Ramashau Aluwani
UNISA E-Tutor: FAC 1502 (Group 3E)
“I will work hard until I don’t have to introduce myself” Ramashau Aluwani
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REASONS WHY BANK STATEMENT DO NOT
AGREE WITH BANK ACCOUNT
Some of the reasons why the two balances do not agreeOutstanding cheques• These are cheques issued to suppliers during the statement period but which have
not yet been presented to the bank for payment
Outstanding deposits
• These are deposits made by the entity during the statement period but which havenot yet been credited by the bank
Direct deposits
• These are deposits made by customers directly into the bank account of the entity
Bank Charges
• These comprise of service fees, cost of cheque books, commissions, ledger fees
Interest charged on overdraft
•
This is the cost of overdrawing the bank balanceDishonoured cheques
• These are cheques received from customers but which were not paid by theirrespective banks because they do not have sufficient funds
Mistakes and omissions made by both the entity and the bank
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REASONS LISTED CAN CLASSIFIED AS FOLLOWS
Entries in the cash receipts and cash payments journals but whichare not in the bank statement
• Outstanding cheques• Outstanding deposits
Items in the bank statement but which are not in the cash receiptsand cash payments journals:
• Direct deposits• Bank charges
• Stop orders
• Dishonoured cheques/Unpaid cheques (R/D)
• Interest on overdraft
Items affecting both the bank statement and the cash receiptsand cash payments journals
• Mistakes made by both the entity and the bank
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PROCEDURE TO FOLLOW IN THE
RECONCILIATION PROCESS• If a bank reconciliation statement was completed for the previous
month the bank statement must first be compared with that bankreconciliation statement to ascertain whether the outstandingitems and corrections have been done by the bank.
• Compare items on the debit side of the bank reconciliationstatement with entries on the debit side of the bank statement andcredit entries on the reconciliation with credit entries on thestatement.
•
Compare the amounts in the cash receipts journal for the currentmonth with the entries on the credit side of the bank statement.
• Compare the amounts in the cash payments journal for the currentmonth with entries on the debit side of the bank statement.
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PROCEDURE TO FOLLOW IN THE
RECONCILIATION PROCESS (continued) • Adjust the cash receipts journal and the cash payments journal
with items which are in the bank statement but not in the cashreceipts and cash payments journals, for example, directdeposits, bank charges and dishonoured cheques.
• Use the totals obtained from the adjusted cash receipts and cashpayments journals to prepare the bank account.
• Prepare a bank reconciliation statement using the outstandingcheques and deposits and correct any mistakes made by both
the bank and the entity. Always start with the balance as perbank statement. The final balance on the bank reconciliationstatement should agree with the balance of the bank account.
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EXERCISE ON BANK RECON
• Exercise 8.1- Study Guide Page 172-175
The bank reconciliation statement for June 20.0
and the CRJ, CPJ, Bank account and Bank
statement of Benson Traders for July 20.0.Additional information
(a) S Swan and P Saxon are debtors of the business
(b) The deposit on 30/07/20.0 is in respect on rentreceived.
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EXERCISE 8.1
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BANK STATEMENT
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SOLUTION TO EXERCISE 8.1
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SOLUTION TO EXERCISE 8.1
• Adjust the Cash
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SOLUTION TO EXERCISE 8.1
GENERAL LEDGER
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SOLUTION TO EXERCISE 8.1
BANK RECONCILIATION STATEMENT
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GOLDEN RULES• Transactions or corrections which the entity must react on, must be recorded in
the two cash journals (CRJ & CPJ) of the entity, e.g bank charges, interest, debit or
stop orders, errors in the books of the entity, stale cheques
• Transactions or corrections which the bank must react on must be recorded in the
bank reconciliation e.g deposits not yet credited, unpaid cheques and errors made
by the bank to be corrected.
• A favourable bank account balance is on the debit side of the bank account as wellas on the bank reconciliation statement
• An unfavourable or overdrawn bank account balance is on the credit side of the
bank account as well as on the bank reconciliation statement
• A favourable bank statement balance is on the credit side of the bank statement as
well as on the bank reconciliation statement.
• An unfavourable or overdrawn bank statement balance is on the debit side of the
bank statement as well as on the bank reconciliation statement.
• Remember : “YOU GO BIG OR YOU GO HOME” “BEST OR NOTHING”
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EXERCISES ON BANK RECON
PREVIOUS EXAM QUESTION PAPERS
• QUESTION 1 (OCT-NOV 2013)• QUESTION 4 (MAY-JUN 2014)
• QUESTION 1 (OCT-NOV 2014)
• QUESTION 3 (MAY-JUN 2015)
•
QUESTION 2 (OCT-NOV 2015)NB: Previous exam papers are accessible in the main-site under Official Study Material
STUDY GUIDE
• EXERCISE 8.2 (PAGE 175-177)
•
REVISION EXERCISE 1 (PAGE 180-182)• REVISION EXERCISE 2 (PAGE 183-184)
• REVISION EXERCISE 3 (PAGE 185-186)
• REVISION EXERCISE 4 (PAGE 187)
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SELF ASSESSMENT TICKBOX
THIS IS AN OPPORTUNITY TO EVALUATE YOURSELF!
NO. TOPIC STATUS TICK1 STUDY UNIT 1 - 5 DONE
2 STUDY UNIT 6 DONE
3 STUDY UNIT 7 DONE
4 STUDY UNIT 8 DONE5 STUDY UNIT 9 DONE
6 ASSIGNMENT NO. 1 DONE
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