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

At which step in the bank reconciliation process might Joshua first suspect that he has overdrawn his account?

When recording outstanding checks that have not yet cleared the bank

When comparing his check register balance to the bank statement and noticing a negative balance

When adjusting the bank statement for bank service charges

When identifying deposits in transit that have not yet appeared on the bank statement

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Verified step by step guidance

Understand the purpose of bank reconciliation: Bank reconciliation is the process of comparing the bank statement with the company's check register to identify discrepancies and ensure the accuracy of financial records.

Review the check register balance: Joshua should first compare the check register balance to the bank statement balance. This step helps identify whether the account balance is negative, which could indicate an overdraft.

Identify deposits in transit: Deposits in transit are amounts recorded in the check register but not yet reflected in the bank statement. These should be noted to ensure they are accounted for correctly.

Record outstanding checks: Outstanding checks are payments recorded in the check register but not yet cleared by the bank. These should be subtracted from the bank statement balance during reconciliation.

Adjust for bank service charges: Bank service charges are fees deducted by the bank that may not yet be recorded in the check register. These should be accounted for to reconcile the balances accurately.