Bank Reconciliation

| Used to keep track of all the financial transaction in a business such as all items purchased, all bills paid, and all payroll calculations

b. There are two differences between the bank statement and the check register. Describe each of them. (2-4 sentences. 1.0 points) TIP: These are transactions that Jessie Robinson forgot to write down in the check register.

E. Why does the auditor not use the same tolerable misstatement or percentage of account balance for all financial statement accounts?

b. There are two differences between the bank statement and the check register. Describe each of them. (2-4 sentences. 1.0 points) TIP: These are transactions that Jessie

All businesses and organisations have to check to see that the information they have stored is accurate. For example, the money coming in and going out have to be correctly recorded otherwise it will look as if the company has not made much profit and it can affect the share prices of the company, affect the employees as the company might not be able to pay the employees and will have to cut down on staff, lenders will not agree to lend money, etc.

b. There are two differences between the bank statement and the check register. Describe each of them. (2-4 sentences. 1.0 points) TIP: These are transactions that Jessie Robinson forgot to write down in the check register.

Fill in the blanks with the correct vocabulary terms from this chapter. 1. Judy was unaware that checks were processed through at her bank. before they arrived

1. On november 1, 2009 Broom company received a bank statement that showed a $2,950 balance. Broom showed a $4,010 checking account balance. The bank did not return the check No. 124 for $1,080 and check No 138 for $720. A $3,200 deposit made on October 30 was in transit. The bank charged Broom $12 for check

17. Which of the following is not a procedure for control of cash payments? A. B. C. D. Checks should be properly authorized with approval signatures. The business should provide written

The entries used to record the disposition when the receivables are sold to a factor often detail the cash received plus the service charge. The company can then balance their receivables account. When a credit card company records a credit card

‘Cash and cash equivalents’ include certain short-term investments and, in some cases, bank overdrafts. Like IFRS, ‘cash and cash equivalents’ include certain shortterm investments, although not necessarily the same short-term investments as under IFRS. Unlike IFRS, bank overdrafts are considered a form of short-term financing, with changes therein classified as financing activities. The statement of cash flows presents cash flows during the period, classified by operating, investing and financing activities. Like IFRS, the statement of cash flows presents cash flows during the period, classified by operating, investing and financing activities. The separate components of a single transaction are classified as operating, investing or financing. Unlike IFRS, cash receipts and payments with attributes of more than one class of cash flows are classified based on the predominant source of the cash flows unless the underlying transaction is accounted for as having different components. Cash flows from operating activities may be presented using either the direct method or the indirect method. If the direct method is used, then an entity presents a reconciliation of profit or loss to net cash flows from operating activities; however, in our experience practice varies regarding the measure of profit or loss used. Like IFRS, cash flows from operating activities may be presented using either the direct method or the indirect method. Like IFRS, if

Cash receipts and cash disbursements are from one and only one cash account. New cash accounts are added to the database when they are opened with a deposit. Sometime after this checks can be written from them. Employees are added to the database on the day they are hired (but before they are involved in a purchase or sale, or involved with a vendor). Cash accounts can have many receipts and many disbursements.

The process of recording and posting the effects of business transaction is done in a double entry t-form. The total dollar amount of debits must equal the total dollar amount of credits, with debits to the left and account credit to the right. Broken down, Assets = Liabilities + Stakeholder Equity. “Since debits increase assets, expense, and dividend accounts, they normally have debit balances. Conversely, because credits increase liability, capital stock, retained earnings, and revenue accounts, they normally have credit balances.”( Edwards, J. D., Hermanson, R.H., & Maher, M. W. (2011). p.84)

B. Closing Device: So, the next time you use your credit card or atm card be a little more careful and make

thus minimizing the amount of currency that the Company has on hand at any point in time during the week. Additionally, the use of the bank on the daily basis facilitates the control of cash because it creates a double record of all bank transactions - one by the Company and one by the bank. Also we recommend that all receipts be deposited in the