Chapter 10
Cash Controls
298
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
Jun 17 Deposit
400
3,900 DR
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 17 Deposit
400
3,900
Jun 19 NSF Cheque
400
3,500
Jun 19 NSF Charge
10
3,490
______________
Figure 10.11
The bank reconciliation for this item is shown in Figure 10.12.
HR Clothing
Bank Reconciliation
June 30, 2016
Ledger
Bank
Balance as per records
$3,900
$3,490
Less:
NSF Cheque
(400)
Charges for NSF Cheque
(10)
Reconciled balance
$3,490
$3,490
______________
Figure 10.12
This adjustment should also be recorded in the journal and updated in the ledger. Since an NSF
cheque represents the amount of cash receipts unsuccessfully collected, this amount should be
added to the company’s accounts receivable account. In addition, the bank charge associated with
the NSF cheque should also be recorded.The journal entries are shown in Figure 10.13. To keep
the charges separate from the other bank charges, an account called NSF charges expense is used.
