Bank

Reconcilia,on
Reconcilia)on Procedures

+ Deposit in Transit

+ Notes collected by bank

NSF (bounced) checks

Check printing or other

service charges

Outstanding Checks

+- Bank Errors

+- Book Errors
CORRECT BALANCE

CORRECT BALANCE

Bank Reconcilia,on
The following informa,on pertains to Family Video Company.
1. Cash balance per bank, July 31, $7,263.
2. Cash balance per books, July 31, $7,284.
3. July bank service charge not recorded by the depositor $28.
4. Deposits in transit, July 31, $1,500.
5. Bank collected $900 note for Family in July, plus interest $36, less fee

$20.The collec,on has not been recorded by Family, and no interest has
been accrued.
6. Outstanding checks, July 31, $591.

Instruc)ons
a) Prepare a bank reconcilia,on at July 31.
b) Journalize the adjus,ng entries at July 31 on the books of Family Video
Company.

Bank Reconcilia,on
a) Prepare a bank reconcilia,on at July 31.

Cash balance per bank statement

Add:
Deposit in transit
Less:
Outstanding checks
Adjusted cash balance per bank

Cash balance per books

Add:

Collection of notes receivable

Collection of interest
Less:
Bank service charge
Note collection fee
Adjusted cash balance per books

$7,263
1,500
(591)
$8,172
$7,284
900
36
(28)
(20)
$8,172

Bank Reconcilia,on
E8-11 b) Journalize the adjus,ng entries at July 31 on the books of Family Video
Company.
Dr.
Cr.
July 31
Miscellaneous expense
28
Bank
July 31

28

Bank
916
Miscellaneous expense 20
Interest revenue

36

Notes receivable 900

Note: Adjus,ng journal entry includes only the adjustments to

the cash balance per books.