by Ojeaburu Friday | Jun 20, 2021 | Accounting Articles
What is Bank Reconciliation Bank Reconciliation Statement s the verification of all the entries in the bank statement with the bank book of the business. First, let understand what bank statement and cash book mean. A bank statement is the financial statement showing the details of all the transactions that the business had made through the bank account. While cash book is subsidiary book in which all cash transactions of receipts and payments are recorded. Definition of Terms Bank charges: This is money deducted from the entity account by the Bank to cover the cost of looking after the account. Unpresented cheque: Is a cheque draw but not yet been presented at the drawer’s bank. Uncleared cheque/ effect: Are bank cheque that passed through the clearing system but not yet cleared. It appears on the debit side of the cash book. Dividend: This is direct dividend receive into bank account. Standing order: This is an order given to the bank to pay a fixed sum of money at regular intervals from one’s bank account to a designated payee. e.g. paying rent, paying utility bill etc. Advantage of standing order It helps to save the repeated drawing cheque;They help to save spending money on stationery and postage andit is certain that payments are made on the due date. Disadvantages of standing order There are bank charges for such services. Dishonoured Cheque: This is cheque rejected by Bank. Top 11 of what will give rise to dishonoured cheque When cheques are not signed or signed incorrectly (i.e. Irregular Signature)No date shown on the chequeWhen the cheque is mutilatedInsufficient funds in the...
by admin | May 27, 2021 | Accounting Articles
What is bank reconciliation statement? How to prepare bank reconciliation statement. Bank reconciliation statement without adjusted cash book. What can bring discrepancies between bank statement and cash book How to prepare bank reconciliation statement #10 –...
