6
Banking Procedures
2. Preprinted deposit tickets take less time to fill out and lessen the chance of error or fraud.
4. Payee: person or company to whom check is payable.
5. So one doesn’t forget to reduce the checkbook balance. Check stubs aid in updating journals.
7. After a bank reconciliation is prepared, journal entries are prepared.
8. Outstanding checks are subtracted from the bank balance because the bank has no idea they have
10. The adjustments to the checkbook are not recorded in the general journal so they need to be put in
the journal.
12. Major advantage is convenience; main disadvantage is security.
14. Disagree; Petty Cash is an asset.
16. Debiting totals of individual expenses updates the ledger to record where cash was used. After
17. The change fund, an asset, aids in making change to customers who pay cash.
19. The question in this case is whether Sean should report to the bank that the company’s account is
SOLUTIONS TO CONCEPT CHECKS
1.
a.
2
b.
1
c.
4
d.
3
e.
3
f.
4
2.
c, d, e, f
3.
Checkbook Balance
$1,855.80
Balance per Bank
$ 1,975.40
Add:
Add:
_______
Deposits in Transit
271.20
Subtotal
1,855.80
Subtotal
2,246.60
Deduct:
Deduct:
NSF Check
$59.80
Outstanding Checks
461.50
Bank Service
Charge
10.90
70.70
Reconciled Balance
$ 1,785.10
Reconciled Balance
$ 1,785.10
Capital Co.
Bank Reconciliation as of September 30, 201X
BALANCE PER BANK
4.
a.
1,2,4
b.
1,2
c.
3,4
d.
3,4
e.
1,2
f.
1,2,4
SOLUTIONS TO SET A EXERCISES
6A-1.
Checkbook Balance
$ 1,314
Balance per Bank
$ 1,050
Add:
_____
Deposits in Transit
800
Subtotal
$ 1,314
Subtotal
$ 1,850
Deduct:
Deduct:
NSF Check
$53
Outstanding Checks
654
Bank Service
Charge
65
118
Reconciled Balance
$ 1,196
Reconciled Balance
$ 1,196
Feb.
28
Service Charge Expense
6
5
00
Accounts Receivable
5
3
00
Cash
1
1
8
00
Bang Co.
Bank Reconciliation as of February 28, 201X
BALANCE PER BANK
EXERCISES (CONTINUED)
6A-2.
Mar.
1
Petty Cash
1
0
2
00
Cash
1
0
2
00
Establishment
31
Donations Expense
1
8
00
Postage Expense
1
7
00
Office Supplies Expense
2
5
00
Miscellaneous Expense
2
0
00
Cash
8
0
00
Replenishment
6A-3.
Mar.
31
Donations Expense
1
8
00
Postage Expense
1
7
00
Office Supplies Expense
2
5
00
Miscellaneous Expense
2
0
00
Cash Short and Over
6
00
Cash
8
6
00
Replenishment
6A-4.
Mar.
31
Donations Expense
1
8
00
Postage Expense
1
7
00
Office Supplies Expense
2
5
00
Miscellaneous Expense
2
0
00
Cash Short and Over
6
00
Cash
7
4
00
Replenishment
EXERCISES (CONTINUED)
6A-5.
Beg. Change Fund
$ 25
+
Cash Register Total
+1,192
=
Cash should have on hand
1,217
–
Counted Cash
1,152
=
Cash Shortage
$ 65
Cash
1
1
2
7
00
Cash Short and Over
6
5
00
Sales
1
1
9
2
00
Record daily sales with shortage
SOLUTIONS TO SET B EXERCISES
6B-1.
Checkbook Balance
$ 1,580
Balance per Bank
$ 1,000
Add:
____
Deposits in Transit
1,100
Subtotal
$ 1,580
Subtotal
$ 2,100
Deduct:
Deduct:
NSF Check
$48
Outstanding Checks
638
Bank Service
Charge
70
118
Reconciled Balance
$ 1,462
Reconciled Balance
$ 1,462
Oct.
31
Service Charge Expense
7
0
00
Accounts Receivable
4
8
00
Cash
1
1
8
00
Zoom Co.
Bank Reconciliation as of October 31, 201X
BALANCE PER BANK
6B-2.
Mar.
1
Petty Cash
1
0
4
00
Cash
1
0
4
00
Establishment
31
Donations Expense
2
1
00
Postage Expense
1
8
00
Office Supplies Expense
2
9
00
Miscellaneous Expense
1
5
00
Cash
8
3
00
Replenishment
6B-3.
Mar.
31
Donations Expense
2
1
00
Postage Expense
1
8
00
Office Supplies Expense
2
9
00
Miscellaneous Expense
1
5
00
Cash Short and Over
4
00
Cash
8
7
00
Replenishment
6B-4.
Mar.
31
Donations Expense
2
1
00
Postage Expense
1
8
00
Office Supplies Expense
2
9
00
Miscellaneous Expense
1
5
00
Cash Short and Over
8
00
Cash
7
5
00
Replenishment
EXERCISES (CONTINUED)
6B-5.
Beg. Change Fund
$ 29
+
Cash Register Total
+1,196
=
Cash should have on hand
1,225
–
Counted Cash
1,156
=
Cash Shortage
$ 69
Cash
1
1
2
7
00
Cash Short and Over
6
9
00
Sales
1
1
9
6
00
Record daily sales with shortage
SOLUTIONS TO SET A PROBLEMS
PROBLEM 6A-1
Checkbook Balance
$ 8,974
Balance per Bank
$ 7,900
Add:
Add:
Proceeds of note
986
Deposits in Transit
2,300
Subtotal
$ 9,960
Subtotal
$ 10,200
Deduct:
Deduct:
Debit Card
Transaction
$1,200
Outstanding Checks
Check No. 122
$850
Bank Service
Charge
50
Check No. 130
640
1,490
1,250
Reconciled Balance
$ 8,710
Reconciled Balance
$ 8,710
GENERAL JOURNAL
Date
201X
Account Titles and Description
PR
Dr.
Cr.
Jul.
31
Cash
9
8
6
00
Miscellaneous Expense
1
4
00
Notes Receivable
1
0
0
0
00
Note Collected at Bank
31
Equipment
1
2
0
0
00
Miscellaneous Expense
5
0
00
Cash
1
2
5
0
00
To record purchase of Equipment and bank
service charges
Denim.com
Bank Reconciliation as of July 31, 201X
BALANCE PER BANK