Bank reconciliation statement

what is bank reconciliation statement.
                                                       a statement which is made to correct and reconcile the balances of bank statement and cash book is bank reconciliation statement.

 purpose of bank reconciliation statement  
                                                                    the main purpose of bank reconciliation statement is to check how many amount is left in our  bank account to issue the check
Reasons of disagreement of bank statement and cash book.
                                                                                   There are six reasons.


1. Deposit in Transit:

The cheques which we have deposited in the bank but not yet have recorded by the bank is a cause of difference between the balance of cash book and bank statement.

2. Outstanding cheques:

The cheques we have issued but not yet have been presented to bank are also a cause of disagreement between the two balances.

3. Bank Adjustments:

If the bank have credited or debited the customer account erroneously then it is also a cause of disagreement of balances between cash book and bank statement.

4. Book Adjustments:

If the customer makes a mistake in cash book while writing the amount or omitting to record the amount then there is a need of bank reconciliation statement.

5. NSF Cheques:

If there is no amount in the bank account the cheque returns dishonor and these cheques are called NSF cheques. These cheques lead to difference between cash book and bank statement.

6. Amount Collected by Bank:

If the cash or cheque is directly collected by the bank and customer has no information about it then it is also a reason of disagreement of balances  between cash book and bank statement.

                

bank reconliation statement

what is bank reconciliation statement:
                                                              Those statement which are made by

accounting cycle

what is accountiny cycle?
                                  accounting cycle is the process which tell us how we start the process of accounting on any transaction or events. they normaly consist on eights steps.
1.journal general
2.legders
3.trial balance
4.adjusting entries
5.adjusted trial balance
6.financial statements
7.closeing entiers
8.post closeing trial balance

JOURNAL GENERIAL.
                                        it is the frist book of accouting in which entries or tranciation are recorded .it tell us orginal entry of the business.
LEDGERS
                 it is the socend book of the accounting in which we post the entries we are recorded in jonrnal.each transaction or entry have its separat ledger .and ledgers hav two form (T-form and runing form ledgers)
UNADJUSTED TRIAL BALANCE.
                                                            trial balance is the thried book of accounting. it have two colums one is callled debit and other one is called credit colums.unadjusted trial balance is made from ledgers and they have equal balance of debit and credit.
ADJUSTING ENTRIES
                                        those entries which are pas to adjust our accounts at the each end of acccounting period is called adjustind entries.
ADJUSTED TRIAL BALANCE
                                                    those trial balance which are made after adjusting entries is called adjusted trial balance.
FINANCIAL STATEMENTS
                                                   those statements which shows the financial postion of the business eihter the business is going profit or loss is called financial statements. they have five types
1.income statement
2.balance sheet
3.cash flow statement
4.statement of change in equity
5.note of come.
CLOSEING ENTRIES
                                      the entries which are pas to close the accounts at the end of accounting period is called closing entries.thies four types of accounts are close afters accounting period 1.income 2.expenes 3.retained earing 4.dividend
POST CLOSING TRIAL BALANCE
                                                             trial balance which are made after closind entries is called post closing trial balance. it is also called balance sheet.

Solution of Adjusting Entries - Case 4.1 - Financial and Managerial Accounting

A:
  no adjusting entry will be passed because advance payment is for three months sep oct and nob. advance payment is adjust before Dec.
B:
       unearned revenue account..............Dr
                                                           
                                                           revenue earned..............Cr
Explanation:
                      adjusting entry will be pass because advance payment is for three months of dec(2009) and jan feb 2010. so it is necessary to pass adjusting entry of one month of dec.
 EFFECT OF ENTRY.
       this entry reduced the liabilities and increase the revenue not only this it also increase the owner's capital
C:
 account receivable...........Dr
                             revenue earned..............Cr
Explanation:
                 adjusting entry will be pass to records the revenue which we earned.because we give services to our customers .there for it is very necessary to record  those services which we perform.
EFFECT OF ENTRY.
this entry increase our asset revenue as will as increase owner's equity.
D:
no adjusting entry is required because benefit of this insurance police will start in next accounting period which is start on 2 Jan.
E:
 depreciation expense .............Dr
                        accumulative depreciation expense..............Cr
EXPLANATION:
                        entry will be pass because the values of fixed asset is decrease with passage of time.
EFFECT OF ENTRY:
                                this entry increase the expense and reduced the revenue thus owner equity also reduced.
F:
      Salary expense .............Dr
                         Salary payable.................Cr
Explanation:
                  entry will record because this expense is Dec.and expense is always record same accounting period .
EFFECT OF ENTRY:
 this entry increase our expense.and  liabilities. and reduced revenue and equity.  

What is accounting