Chapter 10
Cash Controls
306
Add to Ledger Balance*
Add to Bank Balance
• Interest earned
• Direct deposit from customer
• Receipts through EFT
• Bookkeeper error
• Outstanding deposits
• Bank error
Subtract from Ledger Balance*
Subtract from Bank Balance
• Loan interest charges
• Repayment of bank loan
• Bank service charges
• Payments through EFT
• NSF cheques
• Bookkeeper error
• Outstanding cheques
• Bank error
*Must also create a journal entry to update the ledger balance.
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Figure 10.23
To illustrate, we will complete a bank reconciliation with journal entries for HR Clothing for the
month of October 2016. Before comparing the new items, it is always important to consider the
outstanding items from the last period. We need to ensure these items have been cleared. The
completed bank reconciliation from September is shown in Figure 10.24. There are three items
in the bank column that are outstanding as of September 20, 2016: the deposit for $2,200 and
cheques #57 and #59. It is likely that these will clear the bank in October and must be compared
to the October bank statement. If they appear on the bank statement, we will check the items on
the September bank reconciliation and the October bank statement.
HR Clothing
Bank Reconciliation
September 30, 2016
Ledger
Bank
Balance as per records
$7,360
$4,930
Add: Outstanding Deposit
3
2,200
Less: Outstanding Cheques
Cheque #57
3
(350)
Cheque #59
3
(480)
Add: EFT Deposit
250
Less: EFT Rent
(1,300)
Service Charge
(10)
Reconciled Balance
$6,300
$6, 300
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Figure 10.24
