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 of the following best describes the process of balancing your account during a bank reconciliation?

Subtracting service charges from the company's cash records and ignoring any errors found.

Comparing the company's cash records with the bank statement and adjusting for outstanding checks, deposits in transit, and errors to ensure both balances agree.

Adding all outstanding checks to the bank statement balance without considering deposits in transit.

Recording only the deposits made during the month in the company's cash records.

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Verified step by step guidance

Understand the purpose of bank reconciliation: It is the process of comparing the company's cash records with the bank statement to ensure both balances agree. This helps identify discrepancies such as outstanding checks, deposits in transit, and errors.

Identify outstanding checks: These are checks issued by the company but not yet cleared by the bank. Subtract the total of outstanding checks from the bank statement balance.

Account for deposits in transit: These are deposits made by the company that have not yet been recorded by the bank. Add the total of deposits in transit to the bank statement balance.

Adjust for service charges and errors: Deduct any service charges or fees from the company's cash records. Correct any errors found in either the company's records or the bank statement.

Ensure both balances agree: After making all adjustments, compare the adjusted bank statement balance with the adjusted company cash records to confirm they match. If they do not, recheck for any missed adjustments or errors.