Why may there be a difference between the bank statement ending cash balance and the ending balance in the Cash account? Give at least two examples each of adjustments to the bank balance and to the book balance.
Why may there be a difference between the bank statement ending cash balance and the ending balance in the Cash account? Give at least two examples each of adjustments to the bank balance and to the book balance.
College Accounting (Book Only): A Career Approach
13th Edition
ISBN:9781337280570
Author:Scott, Cathy J.
Publisher:Scott, Cathy J.
Chapter6: Bank Accounts, Cash Funds, And Internal Controls
Section: Chapter Questions
Problem 4DQ
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Why may there be a difference between the bank statement ending cash balance and the ending balance in the Cash account? Give at least two examples each of adjustments to the bank balance and to the book balance.
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Timing differences: When accounting records are maintained by both bank and business, time interval occurs and thus cash differences occur between cash amount in the bank statement and the cash account in the company books. These time intervals are referred as timing differences.
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