Republic of the Philippines

Department of Education
REGION 1V-A CALABARZON
SCHOOLS DIVISION OF BATANGAS PROVINCE
MALVAR SENIOR HIGH SCHOOL
POBLACION, MALVAR, BATANGAS

FUNDAMENTALS
OF
ACCOUNTANCY,
BUSINESS AND
MANAGEMENT 2

Address: San Joaquin Road, Poblacion, Malvar, Batangas

Mobile No.: 09171601390
Fundamentals of Accountancy, Business and Management 2 - Grade 12
Alternative Delivery Mode
Quarter 2: Week 2 to 3: Bank Reconciliation Statement

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 12
Fundamentals of
Accountancy,
Business and
Management 2

Bank Reconciliation
Statement
This instructional material was collaboratively developed and
reviewed by educators from public and private schools, colleges, and
or/universities. We encourage teachers and other education
stakeholders to email their feedback, comments, and recommendations
to the Department of Education at action@deped.gov.ph.

We value your feedback and recommendations.

Introductory Message

For the facilitator:

This module was designed and written with the learners in mind. This is meant to help

them understand the principles and concepts of Fundamentals of Accountancy, Business and

Management. The scope of this module permits it to be used in many different learning

situations. The language used recognizes the diverse vocabulary level of students. The lessons

are arranged to follow the standard sequence of the course.

For the success of modular instruction, utmost assistance from learning facilitators such

as you; the parents, guardians, siblings, tutors, and those considered “more knowledgeable

others” is expected. As the facilitator, your job is to help our learners to clearly understand the

use of this module and how to complete the learning tasks in each part of the lessons. Kindly

remind our learners to use separate sheets in answering the pretest, self-check exercises, and

post-test.

For the learner:

This module was designed and written with you in mind. This is meant to help you

understand the principles and concepts of Fundamentals of Accountancy, Business and

Management 2. The scope of this module permits it to be used in many different learning

situations. The language used recognizes the diverse vocabulary level of students. The lessons

are arranged to follow the standard sequence of the course. The following will guide you in the

use of this module:

• Answer the pretest activities at the beginning of each lessons. Use a separate answer

sheet for all the activities that you are asked to complete.

• Carefully read and understand the instructions for every learning task in this

module. You may ask the assistance of a facilitator if you are not sure on what to

do.

• There are practice exercises and assessment activities after you have read the

lessons, you may scan the exercises and read again the lessons before you start

answering.

• The module is intended for “self-learning”, you can study on your own phase, but

always put in mind the time frame intended for you to complete the module.

• There are activities in this module with corresponding answer keys at the end of the

lesson, you can use the answer keys to check your answers and assess your learning.

Honesty is expected from you in answering and checking your own work.

• Each part of the module comes with a corresponding icon that may guide in

knowing your phase and understanding the tasks that you are about to do while

completing this module.

WHAT ARE THE PARTS OF THE MODULE?

What I need to Know

This icon provides the description of what the lesson is about. This part

enumerates the contents and objectives of the lesson. It gives you the idea

of what concepts you should learn, skills you should be able to do, and

values that you can imbibe after completing the lesson.

What I Know

This icon signals a pre-test that you need to answer to determine how much

you know about the topic. At every pre-test, you will find questions to

answer. Write your answers on a separate answer sheet. Do not worry if you

are not sure about an answer to a question, you may leave it blank, but see

to it that you’ll go back to answer it after you have studied or read the text.

What’s In

This icon signals preliminary activities to introduce the lesson using

enabling and prerequisite competencies. This may also mean activities that

will help you review on a previous topic to enable you to recognize its

importance in understanding the present lesson

What’s New

This icon signals the presentation of the new lesson. You will find this icon

before some chunks of text in the following pages. It tells you to carefully

study the concepts, principles, or processes discussed in the text. This part

serves as the discussion and composes the body of the lesson

 What is It

This icon signals the activities that you need to do to check on how well you

understood the topic presented. It involves varieties of exercises to test your

comprehension of the discussed topic as well as your analysis on certain concepts and ideas.

What’s More

This icon deals with formative assessments/exercises based on the intended

learning competencies. The goal is for you to master and develop the

learning outcomes stated as the objectives of the lessons.

What I Have Learned

This icon introduces a list of important ideas to remember. It serves as a

generalization of the concepts that you should have learned from the lesson.

The summary of the important concepts will help you identify the

important points that you should remember and keep in mind.

What I Can Do
This icon will instruct you do perform activities which applies your

learned knowledge to real life situations. This will introduce you

to how can the new knowledge be used in real life. The activities

that you will accomplish oftentimes promote synthesis of new

knowledge to previous knowledge.

Assessment

You will find this icon at the end of every lesson. It signals a self-test to

determine how well you have achieved the objectives set in the unit. Study

the lesson well and you will perform well in the self-test. The assessment
 part may be composed of test questions which entails all the essential

competencies that you need to learn.

Additional Activities

This icon tells you of an additional activity that you may be asked to

perform. The activities in this part can be an additional assignment that

may enrich your learning. Oftentimes activities for this part promote self-reflection and

creativity.

Answer Key

This icon provides you with the answers on most of the objective tests and

exercises in the module. You are expected to only go to this part after you

have finished answering the questions and completing the tasks. For

activities which requires reflections and sharing of opinions and insights

no answer key will be provided.

Are you now set to perform the activities, answer the questions, and read the texts? If

so, then you may get your pen and notebook and start. Always remember to be resourceful

when it comes to learning. You can supplement this module with other sources such as books,

e-learning materials, multimedia presentations, and alike. You have the power to decide your

own phase so be responsible in your own learning.

Enjoy learning!!!
 What I Need to Know

Do you have a bank account? What is your purpose of your account? Why you choose
a bank? How did you choose that bank?
These are the enduring questions meant to be addressed by this instructional material.
This module is a response to the fresh and innovative instructional materials for Accountancy,
Business and Management Track of Senior High School students only.
This module was designed and written with you in mind. It is here to help you master
the nature and concepts of Fundamentals of Accountancy, Business and Management 2. The
scope of this module permits it to be used in many different learning situations. The language
used recognizes the diverse vocabulary level of students. The lessons are arranged to follow
the standard sequence of the course.

This module focuses on identifying the components of Analysis and Interpretation of

Financial Statements. You will also be presented with some concepts and terminologies that
you will get to encounter as you proceed with the lesson. After completing this module, you
are expected to:

• describe the nature of a bank reconciliation statement

• analyze the effects of the identified reconciling items
• prepare a bank reconciliation statement

May you enjoy studying the subject for it will be beneficial not just on you but to your
family and your community as well.
 What I Know

This part intends to initially assess your prior knowledge of the subject.

A. True or False.
1. Deposit in transit are deposits made and recognized both in the bank and book
records.
2. Outstanding checks are checks recorded by the book but are not yet recognized
by the bank.
3. Note collected by the bank on behalf of the company is considered as a debit
memo.
4. Deposits recognized by the book and not yet recorded by the bank is a deposit
in transit.
5. Errors committed by the book should be corrected in the records of both the
bank and company.

B. Identify the following terminologies using the words given below. Write the
letter of your best answer.
a. Check f. debit memo
b. Service charge g. bank statement
c. Withholding Income tax h. Deposit slip
d. Deposit in transit i. Penalty charge
e. Credit memo j. outstanding check

1. The report rendered by the bank to the depositor, usually at the end of the
month.
2. The monetary instrument that is given to payees for payment of liabilities.
3. The business form that accompanies deposits of coins, currency and
collection checks.
4. The amount deducted by the bank when the bank account goes below the
required bank maintaining balance.
 5. The amount deducted by the bank when the depositor draws a check in
excess of existing balance.
6. When the deposit account earns interest, the bank deducts this amount at a
percentage of interest earned.
7. Checks issued by the depositor, not yet presented to bank for payment.
8. Deposits usually at the end of the month that do not appear in the bank
statement.
9. These are amounts added by the bank other than for deposit ass evidenced
by this paper.
10. These amounts deducted by the bank other than for checks withdrawn as
evidenced by this paper.

What’s In

Identify the reconciling items in accordance with the following choices.

Write your answer on the blanks provided.
a. Added to book balance d. Added to bank balance
b. Subtracted to book balance e. Not a reconciling item
c. Subtracted to bank balance
1. The cash left in the office ready for deposit the next banking day.
2. The checks already issued but not yet presented to the bank for encashment
3. Proceeds of bank loan from Bank X.
4. The bank has issued a debit memo representing the checkbooks requested and was
charged to the current account.
5. Customer’s checks were already collected by the bank, but the depositor was not
yet informed until the bank statement date.
6. Check which was erroneously charged by the bank to the company’s current
account.
7. Errors made by the company in recording the checks issued to a creditor.
8. Change fund in the custody of the cashier.
9. Checks deposited by the depositor but considered late deposit and therefore, not
shown as addition to the balance of depositor’s cash balance.
10. No sufficient fund check (NSF).
What’s New

Bank Reconciliation Statement

 What is It

Answer the following:

1. Why is there as need to maintain a good internal control system over cash, cash
receipts and cash payments?
2. What possible problems may arise when only one person has control over the cash
payment process?
3. Identify businesses that you are familiar with. What are the source documents or
proof of their cash receipts ; of their cash payments?
4. What is a bouncing check? Why would banks charge a large penalty for bouncing
checks?
 What’s More

I. Preparation of bank reconciliation statement.

A. Assume the following bank statement and company records.

Company Records of Purity Company for the month of March:

February ending balance 35,000
March ending balance 99,000

Date Receipts Disbursement

2 10,000
5 35,000 check 101
8 30,000
11 15,000
15 10,000 check 102
22 45,000
23 2.000
28 10,000
30 15,000
30 5,000 check 103
31 13,000 check 104

Bank Statement for the month of March:

Date Withdrawals Deposits Balance

February 35,000
2 10,000 45,000
6 35,000 (101) 10,000
9 30,000 40,000
11 15,000 55,000
 15 10,000 (102) 45,000
22 45,000 90,000
23 2,000 92,000
24 10,000 note 102,000
collected
25 12,000 NSF 90,000
28 10,000 100,000

What I Have Learned

After studying the lesson, I can answer the following questions.

1. I have already knew the basic terminologies used in bank reconciliation
statement such as __________________.
2. I can identify the records if the company and the records of the bank.
3. I can prepare the simple bank reconciliation statement.
4. I can journalize the reconciling items.

What I Can Do

Describe an automated teller machine (ATM). What are the transactions with
ATM? What are the advantages of ATMs?
 Assessment

A. Prepare a bank reconciliation statement assuming the following data from

Dos Company for December 2015.

Unadjusted Book balance 84,000

Unadjusted bank balance 100,000

Deposit in Transit 15,000

Outstanding Checks 8,000

Interest credited to account 28,000

Service charge 5,000

B. Prepare a bank reconciliation statement assuming the following data from

Fhey Company for October 2016.

DIT 15,000

Outstanding checks 25,000

Credit memo 20,000

Debit memo 10,000

Bank balance, unadjusted 80,000

Book balance, unadjusted ?

C. The company reported an unadjusted book balance of 842,000. The bank

statement shows an unadjusted balance of P832,000. The bank credited

P9,000 to the account of the company for a bank loan that it has requested.

A P2,000 bank penalty was deducted. An outstanding check worth P73,00

was not yet recorded by the bank.

 • How much is the adjusted cash balance for the month?

• How much is the deposit in transit for the month?

Additional Activities

Prepare a bank reconciliation

A. The company has an unadjusted book balance of P500,000. It has deposit

in transit worth P59,000 and outstanding check worth P18,000. The bank

statement received from the bank shows that interest income worth

P14,000 was credited and a service charge of P9,000 was deducted.

B. The company received the bank statement for the month with an

unadjusted balance of P944,000. It includes a debit memo worth P19,000

and a credit memo for 10,000. The company observed that there is a

deposit in transit worth P200,000 and outstanding checks amounting to

P74,000.

References:
Books:
Ferrer, R & Millan, Z. V. (2017). Fundamentals of Accountancy, Business & Management Part
2. (1st Ed): Sto Tomas, Baguio City: Bandolin Enterprise Haddock, M., Price, J., & Farina, M.
(2012). College Accounting: A Contemporary Approach, Second Edition. New York:
McGraw-Hill/Irwin. Valencia, E. G., & Roxas, G. F. (2010). Basic Accounting (3rd ed.)
Mandaluyong City, Philippines: Valencia Educational Supply. Anastacio, V. (2011).
Accounting Essentials 1, Centro Escolar University Publisher Teaching Guide in Senior High
School Fundamentals of Accountancy Business and Management 2, donated by the
Commission on Higher Education in Collaboration with the Philippine Normal University to
Department of Education, Ma. Cristina A. Labay, MM, writer of ABM-FABM2 12_Q1-W4-
Module 4.
Websites:
To further explore the concept learned today and if it possible to connect the internet, you may
visit the following links: https://www.accountingcoach.com/onlineaccountingcourse.