Scribd
Upload
163 views13 pages

(Intermediate Accounting 1A) : Lecture Aid

This document provides an overview of bank reconciliation and proof of cash concepts for an intermediate accounting class. It defines key terms, explains the basic process for preparing a bank reconciliation and proof of cash, and provides examples and guidelines for properly recording credit memos and debit memos from different time periods. The objectives are to understand cash accounts, petty cash, and basic controls; know how to prepare a bank reconciliation and proof of cash; and be able to apply the concepts through an example problem.

Uploaded by

She RC
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
163 views13 pages

(Intermediate Accounting 1A) : Lecture Aid

This document provides an overview of bank reconciliation and proof of cash concepts for an intermediate accounting class. It defines key terms, explains the basic process for preparing a bank reconciliation and proof of cash, and provides examples and guidelines for properly recording credit memos and debit memos from different time periods. The objectives are to understand cash accounts, petty cash, and basic controls; know how to prepare a bank reconciliation and proof of cash; and be able to apply the concepts through an example problem.

Uploaded by

She RC
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
You are on page 1/ 13

(Intermediate Accounting 1A)

LECTURE AID

2018

ZEUS VERNON B. MILLAN


Chapter 3 BANK RECONCILIATION

Learning Objectives
• Define cash and identify the items that can be
included in the “Cash and Cash Equivalents”
classification.
• Understand the accounting for petty cash
funds and cash shortages/overages.
• Understand the basic internal controls for
cash.
• Prepare a bank reconciliation.
• Prepare a proof of cash.
INTERMEDIATE ACCTG 1A (by:
MILLAN)
Bank reconciliation

Balance per books, end. xx Bal. per bank statement, end. xx


Add: Credit memos (CM) xx Add: Deposits in transit (DIT) xx
Less: Debit memos (DM) (xx) Less: Outstanding checks (OC) (xx)
Add/Less: Book errors xx Add/Less: Bank errors xx
Adjusted balance xx Adjusted balance xx

INTERMEDIATE ACCTG 1A (by:


MILLAN)
Proof of cash - Per books
Nov. 30 Receipts Disbursements Dec. 31
Per books xx xx
CM
November xx (xx)
December xx xx
DM
November (xx) (xx)
December xx (xx)
Book errors:
November
December
Adjusted balances xx xx xx xx

INTERMEDIATE ACCTG 1A (by:


MILLAN)
General guidelines
The proof of cash is similar to a T-account.
PROOF OF CASH T – ACCOUNT

Nov. 30 + Receipts = Disbursements + Dec. 31


Per books 60 + 30 = 20 + 70
ADD: CM
November xx xx
December xx xx
LESS: DM Cash in bank
November xx xx
December xx xx
Nov. 30 60
Book errors: Receipts 30 20 Disbursements
November 70 Dec. 31
December
Adjusted bal. xx + xx = xx + xx
INTERMEDIATE ACCTG 1A (by:
MILLAN)
General guidelines:
The “Nov. 30” and “Dec. 30” columns follow the regular
bank reconciliation format.

Nov. 30 Receipts Disbursements Dec. 31


Per books 60 xx xx 70
ADD: CM
November 25 xx
December xx 35
LESS: DM
November (65) xx
December xx (95)
Book errors:
November
December
Adjusted bal. 20 xx xx 10
INTERMEDIATE ACCTG 1A (by:
MILLAN)
General guidelines:
The “Receipts” and “Disbursements” columns pertain to the
current month only - in this illustration, the month of December.
Nov. 30 Receipts Disbursements Dec. 31
Per books xx xx xx xx
ADD: CM
November xx xx
December xx xx
LESS: DM
November xx xx
December xx xx
Book errors:
November
December
Adjusted bal. xx xx xx xx
INTERMEDIATE ACCTG 1A (by:
MILLAN)
General guidelines:
CREDIT MEMO: LAST MONTH (November)
• The November credit memo is a collection last month. However,
it is only recorded this month (i.e., December).
• Therefore, it is deducted from the “Receipts” column because
only the receipts in December should be included in this column.
Nov. 30 + Receipts = Disbursements + Dec. 31
Per books 60 + 30 = 20 + 70
ADD: CM Notice that
EQUILIBRIUM
November 25 + (25) = + is maintained.
December xx xx
LESS: DM
November xx xx
December xx xx
Book errors:
November
December
Adjusted bal. xx + xx = xx + xx
INTERMEDIATE ACCTG 1A (by:
MILLAN)
General guidelines:
CREDIT MEMO: THIS MONTH (December)
• The December credit memo is a collection this month. However,
it is not yet recorded this month (it will only be recorded next
month).
• Therefore, it is added in the “Receipts” column because it is an
unrecorded receipt in December.
Nov. 30 + Receipts = Disbursements + Dec. 31
Per books 60 + 30 = 20 + 70
ADD: CM
November 25 + (25) =
December + 35 = + 35
LESS: DM
November xx xx
December xx xx
Book errors:
November
December
INTERMEDIATE ACCTG 1A (by:
Adjusted bal. xx + xx MILLAN)
= xx + xx
General guidelines:
• The proof of cash is completed as follows:

Nov. 30 Receipts Disbursements Dec. 31


Per books 60 30 20 70
ADD: CM
November 25 (25)
December 35 35
LESS: DM
November (65) (65)
December 95 (95)
Book errors:
November
December
Adjusted bal. 20 40 50 10

INTERMEDIATE ACCTG 1A (by:


MILLAN)
APPLICATION OF CONCEPTS
 

PROBLEM 2: FOR CLASSROOM DISCUSSION

INTERMEDIATE ACCTG 1A (by: MILLAN)


OPEN FORUM
QUESTIONS????
REACTIONS!!!!!

INTERMEDIATE ACCTG 1A (by: MILLAN)


END
INTERMEDIATE ACCTG 1A (by: MILLAN)

You might also like

pFad - Phonifier reborn

Pfad - The Proxy pFad of © 2024 Garber Painting. All rights reserved.

Note: This service is not intended for secure transactions such as banking, social media, email, or purchasing. Use at your own risk. We assume no liability whatsoever for broken pages.


Alternative Proxies:

Alternative Proxy

pFad Proxy

pFad v3 Proxy

pFad v4 Proxy