Bank Reconciliation Statement

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...


PAY-AS-YOU-EARN Pay-as-you-earn is a tax deducted from employee salary account and remitted on or before the 10th day of the month following the month in which salaries were paid. See relevant sections of the Personal Income Tax Act (PITA). (S.81 of Personal Income Tax Act Cap P8 LFN 2011). S. for details WHAT IS TAXABLE ENTITLEMENT (GROSS) OR GROSS EMOLUMENTS This is the total amount your employer pay to you as salary including all benefits arising from employment. It can be a inform of wages, salaries, allowances including benefits in kind, gratuities, superannuation and any other incomes derived solely by reason of employment. All manner of allowance you earn, provided it’s not a re-imbursement of expense to you, is taxable.  Finance Act 2020, defined “gross income” as income from all sources less non-taxable income, tax-exempt items listed in Paragraph (2) of the Sixth Schedule and all allowable business expenses and capital allowance (finance-act-2020). This is addition to the Act. For example, if you spend an amount for training outside your station and the money is refunded or reimburse through your payslip, it must be subjected to tax. All pay not intended to be taxed must not be passed through payroll. Pay like training cost, transport to attend training etc. TAX RELIEF (TAX ALLOWANCE) This is amounts that can be deducted from a person’s annual income to reduce the amount on which tax is paid. Or the amount of your income which is exempt from tax aside from other statutory deductions. Consolidated relief allowance of N200, 000 or 1 per cent of gross salary or whichever is higher plus 20...
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