Which of the following should not be included in a bank reconciliation statement

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What is a Bank Reconciliation?
Reasons for Difference Between Bank Statement and Company’s Accounting Record
Bank Reconciliation Procedure
Bank Reconciliation Statement
Download the Free Template
Bank Reconciliation Statement Template
Video Explanation of Bank Reconciliation
Related Readings
Which items are not included in bank reconciliation statement?
What should be included in bank reconciliation statement?
Which of the following are not true a bank reconciliation statement is?
Which of the following would not affect a bank reconciliation statement?

If you have difficulty answering the following questions, learn more about this topic by reading our Bank Reconciliation (Explanation).

1. Checks that have been written by a company but have not yet been charged to the company's checking account are referred to as checks.

2. A company's receipts from September 30 that get deposited to the company's bank account on October 1st are referred to as deposits as of September 30.

3. A general guide for reconciling the bank statement is "Put the item where it ".

For items 4-15, select the action necessary to reconcile the bank statement.

Outstanding checks.

Bank service charge.

Interest credited to bank account.

Interest charged to bank account.

Deposit in transit.

Bank inadvertently charged your bank account for another company's bank fees.

10.

Bank erred by posting another company's credit memo to your company's bank account.

11.

Fee charged by bank for returned check.

12.

A company wrote a check for $76 and it cleared the bank for $76. However, the company recorded the check in its Cash account as $67. How is the difference of $9 handled on the bank reconciliation?

13.

A company had a receipt of $989 and correctly prepared its bank deposit slip for $989. However, the company recorded the receipt in its Cash account as $998. How is the difference of $9 handled on the bank reconciliation?

14.

The bank collected a Note Receivable for the company and credited the company's bank account for $1,000.

15.

A company deposited a check from a customer into its checking account. A few days later the check was returned with the notation "Account Closed" and the bank deducted the amount on the bank statement.

16. A company's Cash account has a balance of $851 as of October 31. The bank statement for this account reports a balance of $1,430 as of October 31. There are outstanding checks totaling $840 and a deposit in transit of $60. The bank statement shows interest earned of $19, service charges of $30, a customer's returned check of $100, and a check printing fee of $90. The reconciled Cash balance that should be reported on the company’s balance sheet as of October 31 is $

__________

17.

Which of the following items will require a journal entry to the company's books?

18.

Which of the following will NOT require a journal entry to the company's books?

19.

A company recorded its check #2754 in its accounting records as $98. However, check #2754 was actually written for $89 and it cleared the bank as $89. What adjustment is needed to the Cash balance per books?

20.

A company recorded its August 15 receipts on its books as $165. However, the receipts were actually $156. The deposit slip for the bank was prepared correctly as $156. What adjustment is needed to the Cash balance per books?

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Connecting bank accounts to financial statements

What is a Bank Reconciliation?

A bank reconciliation statement is a document that compares the cash balance on a company’s balance sheet to the corresponding amount on its bank statement. Reconciling the two accounts helps identify whether accounting changes are needed. Bank reconciliations are completed at regular intervals to ensure that the company’s cash records are correct. They also help detect fraud and any cash manipulations.

Reasons for Difference Between Bank Statement and Company’s Accounting Record

When banks send companies a bank statement that contains the company’s beginning cash balance, transactions during the period, and ending cash balance, the bank’s ending cash balance and the company’s ending cash balance are almost always different. Some reasons for the difference are:

Deposits in transit: Cash and checks that have been received and recorded by the company but have not yet been recorded on the bank statement.
Outstanding checks: Checks that have been issued by the company to creditors but the payments have not yet been processed.
Bank service fees: Banks deduct charges for services they provide to customers but these amounts are usually relatively small.
Interest income: Banks pay interest on some bank accounts.
Not sufficient funds (NSF) checks: When a customer deposits a check into an account but the account of the issuer of the check has an insufficient amount to pay the check, the bank deducts from the customer’s account the check that was previously credited. The check is then returned to the depositor as an NSF check.

Nowadays, many companies use specialized accounting software in bank reconciliation to reduce the amount of work and adjustments required and to enable real-time updates.

Bank Reconciliation Procedure

On the bank statement, compare the company’s list of issued checks and deposits to the checks shown on the statement to identify uncleared checks and deposits in transit.
Using the cash balance shown on the bank statement, add back any deposits in transit.
Deduct any outstanding checks.
This will provide the adjusted bank cash balance.
Next, use the company’s ending cash balance, add any interest earned and notes receivable amount.
Deduct any bank service fees, penalties, and NSF checks. This will arrive at the adjusted company cash balance.
After reconciliation, the adjusted bank balance should match with the company’s ending adjusted cash balance.

Example

XYZ Company is closing its books and must prepare a bank reconciliation for the following items:

Bank statement contains an ending balance of $300,000 on February 28, 2018, whereas the company’s ledger shows an ending balance of $260,900
Bank statement contains a $100 service charge for operating the account
Bank statement contains interest income of $20
XYZ issued checks of $50,000 that have not yet been cleared by the bank
XYZ deposited $20,000 but this did not appear on the bank statement
A check for the amount of $470 issued to the office supplier was misreported in the cash payments journal as $370.
A note receivable of $9,800 was collected by the bank.
A check of $520 deposited by the company has been charged back as NSF.

	Amount	Adjustment to Books
Ending Bank Balance	$300,000
Deduct: Uncleared cheques	– $50,000	None
Add: Deposit in transit	+ $20,000	None
Adjusted Bank Balance	$270,000
Ending Book Balance	$260,900
Deduct: Service charge	– $100	Debit expense, credit cash
Add: Interest income	+ $20	Debit cash, credit interest income
Deduct: Error on check	– $100	Debit expense, credit cash
Add: Note receivable	+ $9,800	Debit cash, credit notes receivable
Deduct: NSF check	– $520	Debt accounts receivable, credit cash
Adjusted Book Balance	$270,000

Bank Reconciliation Statement

After recording the journal entries for the company’s book adjustments, a bank reconciliation statement should be produced to reflect all the changes to cash balances for each month. This statement is used by auditors to perform the company’s year-end auditing.

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Bank Reconciliation Statement Template

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Video Explanation of Bank Reconciliation

Below is a video explanation of the bank reconciliation concept and procedure, as well as an example to help you have a better grasp of the calculation of cash balance.

Through financial modeling courses, training, and exercises, anyone in the world can become a great analyst. To keep advancing your career, the additional CFI resources below will be useful:

3 Statement Model
Financial Statement Normalization
Financial Statements for Banks
The Ultimate Cash Flow Guide
See all accounting resources

Which items are not included in bank reconciliation statement?

Unrecorded Transactions.

Interest on deposits credited by the bank but not recorded in the cash book..

Interest on investments collected by the bank but not recorded in the cash book..

Dividends collected by the bank but not recorded in the cash book..

What should be included in bank reconciliation statement?

A bank reconciliation statement is a summary of banking and business activity that reconciles an entity's bank account with its financial records. The statement outlines the deposits, withdrawals, and other activities affecting a bank account for a specific period.

Which of the following are not true a bank reconciliation statement is?

But, it is not true for a bank reconciliation statement that the balance as per cash book and passbook are same as when the two balances are same, bank reconciliation statement is not required.