Chapter 10
Cash Controls
295
Company’s Records
GENERAL LEDGER
Account: Cash
GL. No. 101
Date
Description
DR CR
Balance
Jun 1 Opening Balance
5,000 DR
Jun 2 Cheque #1
300 4,700 DR
Jun 3 Cheque #2
500 4,200 DR
Jun 10 Cheque #3
700 3,500 DR
Bank’s Records
Bank Statement
June 1–June 30, 2016
Date
Description
Withdrawal Deposit Balance
Jun 1 Opening Balance
5,000
Jun 2 Cheque #1
300
4,700
Jun 3 Cheque #2
500
4,200
Jun 10 Cheque #3
700
3,500
Jun 30 Interest
5
3,505
______________
FIGURE 10.5
If the deposit is correct, you will have to record it in the ledger account. For example, in Figure 10.5,
the bank has recorded interest of $5 in the account of HR Clothing on June 30. All the other
cheques have been recorded by the bank as well as by the company. Since the interest earned is
correctly shown on the bank statement, it should also be recorded in the general ledger by debiting
(increasing) cash and crediting (increasing) interest revenue.
Assume that HR Clothing’s ledger balance is $3,500, and the bank statement for the month shows
a balance of $3,505.The bank reconciliation for this is shown in Figure 10.6.
HR Clothing
Bank Reconciliation
June 30, 2016
Ledger
Bank
Balance as per records
$3,500
$3,505
Add: Unrecorded deposits
Interest June 30
5
Reconciled balance
$3,505
$3,505
Figure 10.6
Notice that the adjusting amount is in the ledger column. This means that you must correct the
general ledger balance with an adjusting journal entry.The entry is shown in Figure 10.7. Notice
that the journal entry includes interest revenue. On the Accounting Map, interest revenue is listed
under other revenue on the income statement.
