Bank reconciliation exercises and answers: 4 Bank Reconciliation Statement Problems & Solution Example

The cashbook is a pre-printed book from the stationery shop. Rose just writes down her transactions into it when she remembers. This is not an exhaustive list but it will familiarize you with how banks use abbreviations to identify each type of transaction on a bank statement. Bob found that a bank charge for $37 had not been recorded in the cash book, and also that a cheque he had written to a supplier for $112 had not yet been debited by the bank. How to fix the problem depends on whether you are using book-keeping software or keeping a manual cash book. Below are suggestions for both, but first, you need to find out what caused the problem in the first place.

Step 3: Identify and Correct Errors

For items 4-15, select the action necessary to reconcile the bank statement. For the past 52 years, Harold Averkamp (CPA, MBA) has worked as an accounting supervisor, manager, consultant, university instructor, and innovator in teaching accounting online. The debit side of the cash book had been undercast by Rs. 300. Here is the image of the Cashbook for the Visa Credit Card which Rose started half way through her pre-printed Cashbook (rather than paying for a whole separate Cashbook from the stationers).

The adjusted bank balance is $11,000 and the adjusted book balance is $9,470. Let’s assume there was a deposit of $1,500 that was incorrectly recorded as $1,530. There is a difference in the balance as on 31st March 2019 between the bank statement and Cash Book. You are required to prepare a Bank Reconciliation Statement as on 31st March 2019.

Solution #2: Bank Reconciliation Statement (BRS) Format

Below is the extract for the Cash Book and Bank statement for the month of March 2019. The bank column in Arthur’s cash book showed a debit balance of $5167. Arthur discovered the following when he compared his cash book with his bank statement. A check for Rs. 210 by the customer having been deposited into bank was dishonored by the bankA check was credited twice in Cash Book for worth Rs. 3,000.

Step 2: Prepare the Book Side of the Reconciliation

If you have already found the problem you can skip this part. Okay, here are some exercises on bank reconciliation, along with solutions and explanations. Sometimes it will only be necessary to process just the first step, or just the second step, depending on what transactions are missing or wrong.

Bank Reconciliation Statement

• They do not depict real names, businesses or places known by me.
• She dates them at the date showing on the Bank Statement even though entering them after the transactions dated April 30th in the Cashbook – a mixed date order within the same month is not a huge problem.
• Check received from customers amounting to Rs. 75,850 deposited and properly accounted for in the cash book was not credited by bank.
• This involves meticulously comparing each transaction recorded by the company with those on the bank statement, addressing any discrepancies.
• Rose then enters the amounts into the Reconciliation section of the worksheet.
• Bank Reconciliation Statement is a valuable tool to identify differences between the balance as per Cash Book and bank statement.

From the following particulars prepare a Bank Reconciliation Statement to find out the causes of difference in two balances as on August 31st, 2016 for Four Star (Pvt.) Ltd. All names of people and businesses in these exercises are fictitious and made up from my imagination. They do not depict real names, businesses or places known by me. The Expected Bank Statement Balance of $2,441.50 is the closing Bank Statement balance so it is good and correct. At this stage Rose could also go back to the Bank Statement and tick off the highlighted transactions to show that they have now all been dealt with.

The second exercise reconciles a bank balance of $573,000 to a book balance of $573,000 using cash receipts, deposits, outstanding checks and deposits in transit. The third exercise reconciles a bank balance of $199,875 to a book balance of $199,875 using beginning balances, deposits, outstanding checks, deposits in transit and errors. Journal entries are provided to record a note payable and bank service charges.

• Arthur discovered the following when he compared his cash book with his bank statement.
• Below is the extract for the Cash Book and Bank statement for the month of March 2019.
• He is the sole author of all the materials on AccountingCoach.com.
• It asks for the amount that should be reported as cash in bank on June 30.
• Let’s assume the initial book balance was actually $6,700.

JPN & Co, has a balance of $20,000 as per passbook as on 31st march 2021. Charged commission on collection of outstation check by bank reconciliation exercise and answers bank of worth Rs. 800. Check the final figures on your bank reconciliation document against your general ledger totals and ensure they match. Calculate the difference between your bank statement ending balance and your general ledger total. Your bank statement should properly reflect the difference.

Highlighting missing or different transactions

It is however possible to outsource the task to a bookkeeper or accountant. If you have difficulty answering the following questions, read our In-Depth Explanation for this topic. Rose then enters the amounts into the Reconciliation section of the worksheet. This list will help you decide if you should adjust the Cashbook or use a Bank Reconciliation Worksheet or to do both.