Chapter 9 – Accounting for Cash | DRAFT | Accounting 1, 7 th Edition1 Chapter 9 Accounting for Cash Ch9

Chapter 9 – Accounting for Cash | DRAFT | Accounting 1, 7 th Edition2 Bank Reconciliation This tutorial guides you through the steps of bank reconciliation. For more detailed instructions, refer to Section 9.3 of the Accounting 1 textbook.

Chapter 9 – Accounting for Cash | DRAFT | Accounting 1, 7 th Edition3 Bank Reconciliation Write the header: Who, What, When.

Chapter 9 – Accounting for Cash | DRAFT | Accounting 1, 7 th Edition4 Bank Reconciliation Enter the ending balance from the bank statement.

Chapter 9 – Accounting for Cash | DRAFT | Accounting 1, 7 th Edition5 Bank Reconciliation Determine, record, and total the amount of the outstanding cheques.

Chapter 9 – Accounting for Cash | DRAFT | Accounting 1, 7 th Edition6 Bank Reconciliation When cashed, the outstanding cheques will lower the bank balance.

Chapter 9 – Accounting for Cash | DRAFT | Accounting 1, 7 th Edition7 Bank Reconciliation Add any late deposits, if they exist.

Chapter 9 – Accounting for Cash | DRAFT | Accounting 1, 7 th Edition8 Bank Reconciliation Calculate the adjusted amount of the bank statement’s balance.

Chapter 9 – Accounting for Cash | DRAFT | Accounting 1, 7 th Edition9 Bank Reconciliation Record the balance of cash from the company’s ledger account.

Chapter 9 – Accounting for Cash | DRAFT | Accounting 1, 7 th Edition10 Bank Reconciliation Deduct any Debit memos discovered on the bank statement.

Chapter 9 – Accounting for Cash | DRAFT | Accounting 1, 7 th Edition11 Bank Reconciliation Calculate the new cash balance.

Chapter 9 – Accounting for Cash | DRAFT | Accounting 1, 7 th Edition12 Bank Reconciliation Often, these two amounts will not match. If not, look for credit memos or errors.

Chapter 9 – Accounting for Cash | DRAFT | Accounting 1, 7 th Edition13 Bank Reconciliation In this case, a journalizing error was discovered. It had the effect of increasing the ledger balance of cash.

Chapter 9 – Accounting for Cash | DRAFT | Accounting 1, 7 th Edition14 Bank Reconciliation Calculate the adjusted ledger account balance of cash.

Chapter 9 – Accounting for Cash | DRAFT | Accounting 1, 7 th Edition15 Bank Reconciliation The two adjusted balances agree. Bank reconciliation is almost complete.

Chapter 9 – Accounting for Cash | DRAFT | Accounting 1, 7 th Edition16 Bank Reconciliation Making changes on this statement will not effect the company’s ledger account balance of $ (incorrect due to the journalizing error).

Chapter 9 – Accounting for Cash | DRAFT | Accounting 1, 7 th Edition17 Bank Reconciliation Journal entries are needed to correct the journalizing error and change the company’s ledger account from $ to $