Reconciling the Bank Statement On October 31 Showbiz Video received the bank statement

Problem 11-7

Reconciling the Bank Statement

On October 31 Showbiz Video received the bank statement dated October 30. The accountant reviewed it and found the following:

1. The checkbook balance on October 31 is $13,462.96.

2. The ending bank statement balance is $13,883.80.

3. The bank statement shows a service charge of $17.50.

4. Deposits of $675.00 on October 28 and $925.00 on October 29 do not appear on the bank statement.

5. The following checks are outstanding:

     Check 1766      $125.00      Check 1770      $1,462.19

     Check 1768          69.42       Check 1771          381.73

Instructions. In your working papers:

1. Record the bank service charge in the checkbook in your working papers.

2. Reconcile the bank statement.

3. Record the entry for the bank service charge on general journal page 13.

4. Post the bank service charge journal entry to the proper ledger accounts.

                                                              Step by Step Solution

Step 1 of 5

Recording the bank transactions on a day-day basis helps to sort out the differences. Sometimes, a customer records earlier than bank people when he deposits a check. This makes the balance as per bank book not tallied with balance as per cash book. This way “bank reconciliation statement” helps to rectify the errors.