Chapter#3B: Reconciling the Bank Account Flashcards Preview

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Flashcards in Chapter#3B: Reconciling the Bank Account Deck (9)
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What is Bank Reconciliation?

it allows companies to verify that the company's bank account is accurate


What is a Bank Reconciliation Statement?

its used to account for all outstanding deposits, outstanding checks, bank charges, automatic monthly payments, bank errors and items omitted from the company's books


What is one reason for doing Bank Reconciliation?

Because Banks can make mistakes


What 2 Journals do you use to reconcile your bank account?

Cash Receipts and Cash Disbursements


What is the first step in reconciling the bank account?

to record the balances from the bank statement and general ledger bank account on the bank reconciliation statement


What is Outstanding Deposits

It's when all deposits recorded in the cash receipts journal haven't been deposited in the bank account


What is Outstanding Checks?

its when all checks have been written and are recorded in your Cash Disbursements Journal but do not appear on the Bank Statement


When does Outstanding Checks occur?

when the payee has not cashed or deposited the check in their bank account


What Items must be recorded in the General Ledger account since they have not been recorded?

the items listed on the right side of the bank reconciliation statement