Perform bank reconciliations to ensure company and bank records are correct

1
Table of Contents
Introduction............................................................................................................................................... 2
LO3 Perform bank reconciliations to ensure company and bank records are correct................................3
Bank reconciliations.............................................................................................................................. 3
Task 4: Apply the bank reconciliation process to prepare a number of bank reconciliations.................3
LO4 Reconcile control accounts and shift recorded transactions from the suspense accounts to the right
accounts (KAGAN, 2020)......................................................................................................................... 7
Task 5 You are required to balance all the accounts and check that the total of the balances in the
subsidiary ledgers agrees with the control accounts balances at 31 January 2020.................................7
Conclusion............................................................................................................................................... 16
References............................................................................................................................................... 17


2
Introduction
As an accounting assistant of Hoa Phat Group, I will do some of the work in this report. I will first help
the organization resolve seven situations. Next I will add up the Accounts receivable and Accounts
payable control ledger for two objects, customers and suppliers.


3
LO3 Perform bank reconciliations to ensure company and bank records are correct
Bank reconciliations
Bank reconciliation statements ensure payments have been processed and cash receipts deposited in the
bank. Reconciliation reports help identify discrepancies between bank balances and book balances, in
order to handle the necessary adjustments or corrections. An accountant typically processes
reconciliation reports once a month.
Accountants adjust the closing balance of the bank statement to reflect unpaid checks or withdrawals.
These are transactions in which payment is being made but cash has not yet been accepted by the
recipient. An example is a check mailed on October 30. When preparing a bank reconciliation statement

on October 31, a check mailed the previous day is unlikely to have been cashed, so the accountant will
deduct the amount from the bank balance. There may also be payments received that have not been
processed by the bank, requiring active adjustment.
The balance of the cash account in an entity's financial records may also need to be adjusted. For
example, a bank may charge a fee for opening an account. Banks typically withdraw and process fees
automatically from bank accounts. Therefore, when preparing the reconciliation statement, the bank
must account for any fees taken from the account by making a book entry.
Another item to adjust is interest earned. Interest will be automatically deposited into your bank account
after a certain period of time. As a result, the accountant may need to prepare an entry that increases the
amount currently in the financial records. Finally, adjustments are made to the books, the balance should
be equal to the closing balance of the bank account. If the figures are equal, a successful bank
reconciliation statement has been prepared.
Task 4: Apply the bank reconciliation process to prepare a number of bank reconciliations.
Situation A
Bank reconciliation statement HOA PHAT Group on December 31, 2006
No.
Particular
Plus
Minus
1
Bank balance as per cash book
$32,500
2
Cheques deposited(not credited)
$8,900
3
Cheques issued
$12,500
4
Dividend

$5,000
5
Bank charge
$400
6
Balance as per pass book
$40,700
Balanc
$50,000
$50,000
e
Situation B
No.
1
2
3

Bank reconciliation statement of HOA PHAT Group on June 30, 2006
Particular
Plus
Minus
Bank balance as per cash book
$35,750
Debit charges for credit card fee
$250
Cheques deposited
$7,550


4

4
6
Balanc
e

Discounted bill
Balance as per pass book
$35,750

$3,500
$24,450
$35,750

Situation C
Bank reconciliation statement of HOA PHAT Group on July 31, 2006.
No.
Particular
Plus
Minus
1
Bank balance as per pass book
$27,350
2
Cheques issued
$19,000
3
Cheques deposited into bank
$8,500
4
Paid insurance premium

$5,000
5
Wrongly debited to the firm
$2,000
6
Balance as per cash book
$23,850
Balanc
$42,850
$42,850
e


5
Situation D
No.
1
2
3
4
5
6
Balanc
e

Bank reconciliation statement of FBI on March 31, 2017.
Particular
Plus
Minus
Bank balance as per cash book

$50,000
Cheques issued
$6,000
Collected dividend by bank
$8,000
Bank charges
$400
Cheque deposited
$6,000
Balance as per pass book
$57,600
$64,000
$64,000

Situation E
No.
1
2
3
4
5
Balanc
e

Bank reconciliation statement of FBI on August 31, 2017.
Particular
Plus
Minus
Bank balance as per cash book
$54,000

Bank incidental charges
$100
Cheques deposited
$5,400
Cheques issued
$20,000
Balance as per pass book
$68,500
$74,000
$74,000

Situation F
No.
1
2
3
4
5
Balanc
e

Bank reconciliation statement of FBI on March 31, 2014.
Particular
Plus
Minus
Overdraft by cash book
$8,000
Cheques paid in
$2,000
Cheques issued

$800
Bank charges
$160
Balance as per pass book
$9,360
$10,160
$10,160


6
Situation G
No.
1
2
3
4
5
6
Balanc
e

Bank reconciliation statement of FBI on March 31, 2014.
Particular
Plus
Minus
Overdraft by cash book
$118,100
Cheques received and recorded
$12,400
Payment received

$8,800
Payment received
$27,300
Bank charges
$175,200
Balance as per pass book
$63,200
$202,500
$202,500


7
LO4 Reconcile control accounts and shift recorded transactions from the suspense accounts to the
right accounts[ CITATION JUL20 \l 1033 ]
Task 5 You are required to balance all the accounts and check that the total of the balances in the
subsidiary ledgers agrees with the control accounts balances at 31 January 2020.
1. Supplier
Red & Co:
Journal Entry
No.
1
2
3

Account title and explanation
Account receivable
Revenue
Sale return
Account receivable
Cash received

Account receivable

Debit

Credit
$530
$530
$60
$60
$600
$600

“T” Account:
Dr.

Red & Co Account

Particular

Cr.

Amount

Revenue
Balance brought down

Particular

Amount

$530 Sale return

$60

$1,200 Cash account

$600

$1,730

$660

$1,070

Green Pte Ltd:
Journal entry
No.
1

Account title and explanation
Cash received

Debit

Credit
$350


8
Account receivable

$350

T account
Dr.

Green Pte Ltd Account

Particular
Balance brought down

Cr.

Amount

Particular

Amount

$536 Cash account

$350

$536

$350

$186

9
Yellow enterprise Ltd:
Journal entry
No.
1

Account title and explanation
Bad debt
Account receivable

Debit

Credit
$635
$635

T account
Dr.

Yellow Enterprise Ltd

Particular

Cr.
Particular

Amount

Balance brought down

Amount

$635 Cash account

$635

$635

$635

$0

$0

Blue Sky& Co:
Journal entry:
No.
1
2
3

Account title and explanation
Account receivable
Revenue
Cash account
Account receivable
Discount
Account receivable

Debit

Credit
$400
$400
$1400
$1400
$40
$40


10
T account:
Dr.

Blue Sky & Co
Particular

Amount

Revenue

Cr.
Particular

Amount

$400 Cash account

Balance brought
down

$1,400

$1,352 Discount

$40

$1,752

$1,440

$312

Other account Receivables:
Journal entry:
No.
1
2
3
4
5

Account title and explanation
Account receivable
Sales account
Sale return
Account receivable
Bad debts expense
Account receivable
Cash account

Account receivable
Cash discount
Account receivable

Debit

Credit
$9,600
$9,600
$540
$540
$120
$120
$14,532
$14,532
$640
$640


11
T account:
Others account
receivables

Dr.
Particular
Balance b/d
Sales account

Amount

Cr.

Particular

Amount

$21,617 Sales return

$540

$9,600 Bad debts

$120

Cash account

$14,532

Cash discount

$640
$15,832

$31,217
$15,385

Control account:
Dr.

Account receivable control
Particular

Amount

Red & Co

$1,070

Green Pte Ltd

$186

Yellow enterprise

$0

Blue Sky & Co

$312

The other account

$15,385
$15,385
$16,953

Cr.
Particular

Amount


12
2. Customer:
Pink marketing:
Journal entry
No.
1

Account title and explanation
Purchase account
Account payable
Purchase return
Cash
Account payable
Cash payment

2
3

Debit

Credit
$1,200
$1,200
$300
$300
$1,500
$1,500

T account
Dr.

Pink marketing

Particular

Amount

Cash Payment
Cash Payment

Cr.
Particular

Amount

$300 Balance brought down

$2,000

$1,500 Purchase account

$1,200

$1,800

$3,200
$1,400

Grey Hardware:
Journal entry
No.
1

Account title and explanation
Account payable
Cash payment

Debit

Credit
$231
$231


13
T account
Dr.

Grey Hardware

Particular

Amount

Cash account

Cr.

Particular

Amount

$231 Balance brought
down

$431

$231

$431
$200

White Stationery Pte Ltd:

Journal entry
No.
1

Account title and explanation
Purchase account
Account payable
Account payable
Cash Payment
Account payable
Cash discount

2
3

Debit

Credit
$105
$105
$100
$100
$21
.$21

T account:
Dr.
Particular

White stationery Pte Ltd
Amount

Particular

Cr.
Amount

Cash account

$100 Purchases account

$105

Cash account

$21 Balance brought
down

$210

$121

$315
$194


14
Black equipment & Co
Journal entry:
No.
1

Account title and explanation
Account payable
Cash

Debit

Credit
$312
$312

T account:
Black Equipment & Co

account

Dr.
Particular

Amount

Cash account

Cr.

Particular

$312

Amount

Balance brought forward

$312

$312

$312

$0

$0

Other account payables:

Journal entry:
No.
1
2
3
4

Account title and explanation
Purchase account
Account payable
Account payable
Purchase returned
Account payable
Cash payment
Account payable
Cash discount

Debit

Credit
$4,200
$4,200
$200
$200
$2,500
$2,500
$85
$85

15
T account:
Others account payables

Dr.
Particular
Purchase returned

Amount

Particular

Cr.
Amount

$200 Purchases account

Cash account

$2,500

Cash discount

$85

$4,200

Balance brought forward

$12,470

$2,785

$16,670
$13,885

Control account:
Account payables
control account

Dr.
Particular

Amount

Particular

Cr.
Amount

White stationery

$194

Black equipment

$0

Pink Marketing

$1,400

Grey Hardware

$200

Others account
payable

$13,885
$15,679
$15,679


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Conclusion
I have completed my report. This report helps Hoa Phat Group control the cash flow and manage the
company's bank account in terms of cash flow.


17
References
KAGAN, J., 2020. Investopedia. [Online]
Available at: />[Accessed 03 07 2021].


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Submitted to College of Banking and Financial Studies

Student Paper


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