Financial accounting I – Reconciliation statement
BBA | BBA-BI | BBA-TT | BCIS 1st
PU 2015 Spring Q. No. 16
December 31st bank statement of ABC Company showed a balance of Rs. 6,873.40. On this date, the cash account in the company’s was Rs. 2,994.70.
Your review reveals:
Cheques under collection on December 31st, Rs. 298.7 outstanding cheques for Rs. 1,718.00
Cheques for Rs. 2,194.90 issued to a supplier was recorded by the bank as Rs. 2,914.90.
Bill receivable of Rs. 5,000 and interest of Rs. 300 collected by the bank have not been recorded in company’s account.
Cheque for Rs. 730.60 received from customer was returned to the bank owing to lack of funds with the bank
Bank service charge Rs. 90
In accordance with company’s standing instruction December 31, the bank paid insurance premium of Rs. 1,300 for the company’s car. The accountant did not record the transaction.
Required: a. Bank reconciliation statement for the month of December. 
b. Necessary journal entries. 
Bank Reconciliation Statement
As on December 31st
|Balance as per bank statement|
Add: Deposit in transit
Less: Errors in recording
Less: Outstanding checks
|Adjusted balance as per bank statement||Rs. 6,174.1|
|Balance as per company’s book|
Add: Bill receivable
Add: Interest on bill receivable
Less: NSF check
Less: Bank service charge
Less: Insurance premium paid by bank
|Adjusted balance as per company’s book||Rs. 6,174.1|
In the book of ABC Company
Cash a/c Dr. Rs. 5,300
Bill receivable a/c Rs. 5,000
Interest on bill receivable a/c Rs. 300
(To record the bill receivable and interest on bill receivable collected by the bank)
NSF check a/c, Dr. Rs. 730.60
Bank service charges a/c Dr. Rs. 90
Insurance premium a/c Dr. Rs. 1,300
Cash a/c Rs. 2,120.6
(To record the NSF check, bank service charge, and insurance premium made by the bank)
Also, know about
The checks which are written by the company but not make payment by the bank are called outstanding checks. As outstanding checks are not debited or not paid by the bank, these checks should be deducted from the balance of bank statement.