Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

6. Internal Controls and Reporting Cash

Bank Reconciliation

Financial Accounting

6. Internal Controls and Reporting Cash

Bank Reconciliation

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Multiple Choice

Which statement is true about the reconciliation discrepancy report in the context of bank reconciliation?

It eliminates the need for adjusting journal entries.

It is used to record outstanding checks as deposits in transit.

It identifies differences between the bank statement and the company's accounting records.

It is prepared by the bank to notify the company of service charges.

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Verified step by step guidance

Understand the purpose of a reconciliation discrepancy report: It is a tool used during the bank reconciliation process to identify and explain differences between the bank statement and the company's accounting records.

Clarify the role of adjusting journal entries: Adjusting journal entries are necessary to correct discrepancies found during reconciliation, such as recording bank fees or correcting errors in the company's books.

Explain the concept of outstanding checks and deposits in transit: Outstanding checks are payments issued by the company but not yet cleared by the bank, while deposits in transit are amounts recorded by the company but not yet reflected in the bank statement. These are not recorded in the discrepancy report but are part of the reconciliation process.

Highlight the role of the bank in reconciliation: The bank does not prepare the reconciliation discrepancy report; this is done by the company to ensure its records align with the bank statement.

Conclude that the correct statement is: The reconciliation discrepancy report identifies differences between the bank statement and the company's accounting records, helping the company resolve these discrepancies.