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Bank Reconciliation Statement Set out below are the bank account and bank statement of Sinead Power for the month of January 2018 - Leaving Cert Accounting - Question 3 - 2018
Question 3
Bank Reconciliation Statement Set out below are the bank account and bank statement of Sinead Power for the month of January 2018. Dr Bank Account ... show full transcript
Worked Solution & Example Answer:Bank Reconciliation Statement Set out below are the bank account and bank statement of Sinead Power for the month of January 2018 - Leaving Cert Accounting - Question 3 - 2018
Step 1
Show Sinead Power’s adjusted bank account and bring down the adjusted balance.
Answer
To prepare the adjusted bank account, we need to account for the interest received and the bank charges. First, we start with the balance brought forward:
Dr Adjusted Bank Account Cr
€
Jan 1 Balance b/d 4,140 Jan 1 Standing order 60
Jan 2 Interest received 210 Jan 1 Cheque dishonoured 820
Jan 1 Bank charges 210
Balance c/d 4,350
After adjusting for the interest received and the bank charges, the adjusted balance brought down is €4,350.
Step 2
Prepare a statement on 31/01/2018 reconciling the adjusted bank account balance with the bank statement balance.
Answer
To reconcile the adjusted cash book balance with the bank statement, we start with the adjusted cash book balance and make necessary adjustments for cheques and lodgements:
Bank Reconciliation Statement
Adjusted cash book balance €3,385
Add: Cheques drawn not yet cashed:
400102 R. Quigley 2,720
400107 T. Walsh 450
Less: Lodgements not yet credited:
Sales 5,600
Less: Bank error:
Adjustment for bank error 240
Balance as per bank statement 715
The adjusted cash book balance is €3,385 and after accounting for the adjustments, the balance matches the bank statement.