Question Tag: Bank Reconciliation Statement

a)

The accounts clerk of Jide Electronics is unsure of the difference between a bank statement and a bank reconciliation statement and has asked for your assistance in this direction.
Required: Explain the difference between a bank statement and a bank reconciliation statement.             (2 Marks)

b)

She has provided you with the following summary of banking transactions for the period under review:

1. A cheque amounting to N280,000 received and paid into the bank was not credited by the bank until after September 30, 2019;
2. The cash book balance of the business showed an overdraft of N200,000, while the bank statement balance on the same date indicated that the business had a credit balance of N1,930,000;
3. A customer made a direct credit transfer into the business bank account amounting to N1,140,000 in settlement of trade debt, and this was not known until after the receipt of the bank statement;
4. A cheque amounting to N670,000 for the purchase of goods was posted into the cash book as N760,000;
5. A cheque of N1,230,000 dishonoured by the bank remained unreversed in the cash book;
6. Cheques amounting to N2,680,000 issued to a supplier were presented to the bank on October 08, 2019;
7. The bank statement revealed that there was a dividend of N580,000 received as investment income;
8. The bank transferred the sum of N200,000 to ICAN, being the payment on a standing order for annual subscription of staff who were writing professional examinations;

Required:

i. Prepare the adjusted cash book. (11 Marks)
ii. Starting with the balance as per bank statement, prepare the bank reconciliation statement for the month ended September 30, 2019. (7 Marks)