CHAPTER 2: BANK RECONCILIATION naman yung pera mo,

yung transactions mo sa
supplier. Nagbayad ka
ng utang, binayaran mo
siya ng check. Itong si
supplier nagpunta ng
bank, pina encash niya,
nakuha na niya yung
pera. Therefore,
babawasan itong
current account under
RECONCILIATION your name. and
 Pagtutugmain na kung saan mag aagreed cinecredit yung cash as
ang cash amount kay company and sa bank. proof na nabawasan
talaga siya.
COMPANY BANK *assuming na nag open si Company A ng
Nag open ng acc: checking or current account kay bank.
CIB COH
COH Current acc- Company Note: magkabaliktad ang record ni company
A kay bank. For every entry ni company,
*transferring nagkakaron din ng journal entry si bank.
from COH to CIB. *nakacredit si CA-
Company A kasi liability Cash of Company > CIB
yan ng bank sa iyo. Kasi
Cash of Company < CIB
nga nagdeposit ng pera
* <, > (Differences)
si company A kay bank.
Ang tawag sa differences ay reconciling items.
Si bank, may liability kay
company. Kasi pera yan Yung differences is need i-reconcile at
ni company. Kaya yan pagtugmain. Para mapunta ang balance sa
nakacredit. tamang amount.

Nagbayad si Syempre thru checks BANK RECONCILIATION

Company kay ang pagbayad. Kapag  It is a schedule prepared that accounts for
supplier etong si supplier na the differences between: (itong bank recon
(binayaran niya binayaran ni company ay ay isang statement or schedule na
yung a/p): cinlaim na or pina nagpapakita ng differences nung cash
encash yung check. Ang balances per book and cash balances per
nangyayari ay
bank. Kailangan daw na yung dalawang yon
nababawasan pera ni
ay mag agree and makikita ito sa bank
company sa bank, yung
recon statement.)
current account.
A/P a. Cash balances per book (company’s
Cash/CIB Current Acc- Company A record)
Cash b. Cash balances per bank (bank
*debit a/p kasi statement)
mababawasan *ibig sabihin,  It is prepared only for checking
utang. nabawasan na yung account/demand deposit and is prepared
current account ni monthly because the bank provides the
company and at the depositor with the bank statement at the
same time it also pertain beginning (normally first week) of the
na nabawasan din yung following month. (non-moving kasi ang
liability or obligation ng
time deposit and yung savings account is
bank kay company.
nakapassbook and normally naglalagay ka
Dahil nabawasan din
 lang ng pera ron to earn interest. at the EXAMPLE 1: Collections made by the bank on
same time sa time deposit to earn interest. behalf of the entity. (si bank is nangolekta na ng
so hindi siya ginagawa kasi non-moving receivable specifically notes receivable ni
naman. Kung mag move man, immaterial company. Magiging addition na yon sa bank
yung movement. Yung bank recon is account mo. Pero ikaw, di ka pa informed kaya
ginagawa sa checking acc/demand deposit hindi pa siya nagrreflect sa record mo as
kasi ito talaga yung daily ang inflow at addition. Kaya kapag credit memo, magiging
outflow of cash sa bank. May binabayaran, addition sa iyo once na informed ka na).
may dinedeposit)(if january ngayon,
ibibigay yung transaction ng january, EXAMPLE 2: Proceeds of bank loan credited to
ibibigay sa iyo yung bank statement sa first the account of the entity. (si company A,
week ng february. Kaya pwede ng makapag nangutang kay bank. Ang ginawa, na approve
perform ng bank recon abt sa nangyari sa na yung loan mo, edi ibinigay na sa iyo.
january). Nadagdag na sa bank account mo. Hindi ka pa
informed, kaya di pa nagrreflect sa book.)
RECONCILING ITEMS
BOOK RECONCILING BANK RECONCILING EXAMPLE 3: Matured time deposits transferred
ITEMS ITEMS by the bank to the current account of the
1. Credit Memos 1. Deposit in Transit depositor. (si time deposit nagmature na.
2. Debit Memos 2. Outstanding pwede na mawithdraw yung time deposit or
Checks maclaim. Si time deposit, pwede ng directly
3. Book Errors 3. Bank Errors pumasok yung proceeds sa current account pero
di pa ininformed si company A. kaya once na
Book Reconciling Items- nairecord na ni bank. nainform ka na, idadagdag mo yon sa account
Either addition or deduction pero di pa mo).
nagrreflect sa book.
1. Credit Memos (add to book)- these are EXAMPLE 4: Interest income credited to the
collections or deposits made by the bank to account. (kasi nakareflect na kay bank, pero sa
the account of the company but not yet iyo hindi pa. add mo yon once na nainform ka
recorded by the entity. (nadagdagan na na).
yung pera mo sa bank, pero yung record mo
is hindi pa nag uupdate. Hindi ka pa 2. Debit Memos (deduct to book)- these are
informed). charges and deductions made by the bank
to the account of the entity but not yet
(nagpapadala ng credit memo. Means recorded by the entity. (naibawas na ni
meron na siyang mga naidagdag sa account bank. Pero ikaw di ka pa informed.)
ni company A sa bank. Pero di pa alam ni
company A. hindi pa nagrreflect kay [meron ng ibinawas sa bank account mo
company A pero nakareflect na kay bank na pero sa iyo (company A) ay di mo pa alam
magiging reconciling items in book.) na may ibinawas na na ganon. hindi pa
nagrreflect kay company A pero
every time na nagkakaroon ng dagdag kay nakareflect na kay bank na magiging
bank or sa pera ni company at idinedeposit reconciling items in book.]
sa bank. Ang nirerecord ni bank ay:
dinedebit yung account ni company A (CA-
Cash Comp A), credit cash as a proof na
Current Account- Company A nabawasan yung amount ni company A sa
bank).
Cinecredit ni bank yung CA. Current Account- Company A
Cash
 maiibawas ni company A sa account niya.
Example 1: Bank Service Charges- these include Nagkaron siya ng payment of loan. Technically
bank charges for interest, collection, checkbook pag nareceive niya yung bank statement,
and penalty. (interest- interest expense) maiinform siya, magddebit siya ng a/p and
credit ng cash/cib. Until such time, reconciling
Example 2: NSF/DAIF/DAUD checks- these are items mo pa rin yan at kailangang maging
checks deposited and already recorded by the deduction mo rin yan. Kasi nga bawas na siya
bank but subsequently returned by the bank to kay bank, pero sa iyo wala ka pang ginagawa na
the entity because of insufficiency of fund. (si dapat mo ibawas).
company A ay may customer. Si customer ay
may check, nung binayaran ka ng check EXAMPLE 4: Final withholding tax on interest
syempre ina assume mo na maeencash mo ito income- (may 20% withholding tax yung interest
or pwede mong maideposit. Nung nareceive na income. Yung withholding tax na yon. Magiging
ni company A yung check kay customer, debit sa iyo. Ibabawas sa iyo. Halimbawa,
technically nagrecord na ng debit cash, credit 100php ang iyong interest x 20% = 20php. Dapat
a/r or income. Ang ginawa ni company A ay 80php lang ang papasok sa iyo. So part pa rin
pumunta sa bank and dineposit yung check. The siya ng idedebit).
bank found out na wala anman pala or kulang
ang laman nung check. For example, ang 3. Book Errors- overstated (Deduct) ;
binayad ni customer ay 100k, pag dating sa understated (Add).
bank, nalaman ni bank na 50k lang ang laman
ng account ni customer. Kaya ang mangyayari, Bank Reconciling Items- nairecord na ni book.
instead of magiging addition kay bank, Either addition or deduction pero di pa
mababawasan. Kaya sabi na subsequently nagrreflect sa bank.
returned by the bank to the entity because of 1. Deposit in Transit (add to bank)- these are
insufficiency of fund. Kailangan mo yon I-adjust deposits already recorded in the cash
sa part mo or sa book mo dahil nga wala yong books in one period but were taken up by
laman pero naging addition mo na siya nung the bank only in the next period. (Si
una.) company A, nakarecord na siya sa january
as debit cash/CIB. However, nagreflect
Adjusting Entry: lang sa bank statement ay month of
a/r february na. ibig sabihin, nung nagpadala
CIB si bank kay company A ng bank
statement, hindi pa nagrreflect yung
Baliktarin yung entry pag nareceive na yung cash/cib na inirecord na ni company A.
utang. kumbaga understated ang bank
statement dahil hindi pa nagreflect yung
EXAMPLE 3: Payment of Loan- This pertains to deposit na dapat magrreflect na yung
amount deducted from the current account of bank statement yon.)
the depositor in payment for loan which the
depositor owes to the bank and which has Example 1: collections already forwarded
already matured. (si company A ay may utang to the bank for deposit but too late to
kay bank. Ang nangyari, nagmature na yung appear in the bank statement. (inabutan
utang ni company A kay bank. Ang ginawa is ng cut off. Kasi may cut off period sa bank.
ibinawas na lang sa bank account niya. Kasi nga Ibig sabihin, kay company A, nakalibro na
nagmature na, kailangan ng bayaran. Nagkaron yung deposit, nadagdagan na cash. Pero
ng payment of loan na hindi pa naiinform si kay bank statement, hindi nagreflect.
company A pero ibinawas na ni bank. Maiinform Kaya ang tawag sa kanya is deposit in
lang si company A once na magpadala ng bank transit. Kasi nagreflect siya instead of
statement si bank. Don pa lang yung time na january, february na magrreflect sa bank
 statement. Kaya nung pinadalhan ka ng 9k. at kapag understated, ibig sabihin ay
bank statement nung january, wala pa ron kailangang idagdag).
yung deposit.)
Example 2: undeposited collections BANK OR BOOK (DEPOSITOR) ERRORS
awaiting delivery to the bank for deposit. Errors made by the company or the bank that
(literal na nasa kamay pa ni company. must be corrected for the reconciliation to
Pero nakadebit na as collection, nakadebit balance. (pwedeng si company or si bank yung
na as cash). nagkamali)

2. Outstanding Checks (deduct to bank)- The following are the rules for errors assuming
these are checks written and released to the company is using the adjusted balance
payees and are already recorded in the method of presenting bank reconciliation.
cash books but are not yet presented for
encashment or deposit to the bank. (For EFFECT OF THE
TREATMENT
example, si company A is nagbayad ng ERRORS
check sa supplier (company B). so hawak 1. Understatement ADD on the adjusted
ni company b yung check kasi nakuha na of cash receipts. cash in bank
niya kay company A. dahil nakapagbayad balance.
na si company A kay company B. ibig 2. Overstatement of DEDUCT from the
sabihin, ang mangyayari, kung yan ay cash receipts. unadjusted cash in
bank balance.
utang, ang irrecord ni company A ay debit
3. Understatement DEDUCT from the
a/p, credit cash/cib. The problem is, si
of cash unadjusted cash in
company b is di pa pinapa encash yung
disbursements. bank balance.
check kay bank. Di pa siya napunta dito
4. Overstatement of ADD on the
para ipa encash (papaltan ng pera). Ibig cash unadjusted cash in
sabihin, nabawasan na si company A, pero disbursements. bank balance.
dahil si company b is hindi pa ine encash
yung check or hindi pa dinedeposit sa IMPORTANT NOTE!
bank account niya. Ibig sabihin, walang Between book and bank, most likely
kaalam alam si bank na meron na palang nagkakamali si book.
binayaran si company A. since di pa
napapaltan yung check, pano malalaman FORMS OF BANK RECONCILIATION
ni bank na mababawasan na yung pera ni 1. Adjusted Balance Method (commonly
company A. kaya ang tawag ay used)- pinapakita yung adjusted
outstanding checks). amount of the book (record ng
company) and adjusted amount of the
3. Bank Errors [either overstated (deduct) or bank. Kailangan tally or equal.
understated (add)]- if any/meron. 2. Book to Bank Method- ina-assume dito
(nagkamali ang bank.oveerstated means na si bank yung tama. At si book yung
napasobra ang account. For example, may differences. I aadjust from book to
instead of ang macredit, ibig sabihin ang bank.
madagdag sa amount ng bank account ni 3. Bank to Book Method- I aadjust mo
company A ay 1k, naging 10k. ibig sabihin yung amount nung bank papunta kay
overstated siya ng 9k. at dahil overstated libro. Kumbaga yung record ni company
siya, dapat ibalik niya sa tama. Another yung tama.
example is, ang dapat na madagdag sa
bank account na amount ay 10k. pero ang . BOOK differences BANK
nairecord lang ni bank ay 1k. ibig sabihin
ay understated yung balance sa bank na
Reconciling items
Reconciling items- makakapagpaliwanag ano ba
ang tamang amount ni book at ano ba talaga
ang tamang amount ni bank. Listahan ng mga
transactions na merong nairecord si bank na
hindi nairecord ni book, vice versa. Timing
difference ang nangyari.

PROFORMA RECONCILIATION Bank To Book Method

BANK BALANCE Pxx
Adjusted Balance Method Add: xx
BOOK Deposit in Transit xx
BANK Debit Memos xx
BALANCE Pxx Pxx
BALANCE Total xx
(unadjusted)
Add: Credit Add: Deposit Less: xx
xx xx
memos in transit Outstanding Checks xx
Total xx Total xx Credit Memos xx
Less: BOOK BALANCE Pxx
Less: Debit
xx Outstanding xx (DIT still add, OC still deduct. But debit memo
memos
checks and credit memo na di pa nakareflect kay book,
ADJUSTED ADJUSTED wherein nakareflect na sa book. Kailangan,
BOOK Pxx BANK Pxx ibalik mo para di mabawas. Kaya lahat ng debit
BALANCE BALANCE memo is ina add back, credit memo is deduct.
Kumbaga kabaliktaran. Ang reyna ay si book.
Book To Bank Method Siya yung masusunod.)
BOOK BALANCE Pxx
Add: xx
Credit Memos xx
Outstanding Checks xx
Total xx
Less: xx
Debit Memos xx
Deposit in Transit xx
BANK BALANCE Pxx
(outstanding checks na nakareflect sa iyo, pero
hindi pa naman nakareflect kay bank. Therefore,
tatanggalin mo yan sa iyo kasi hindi naman yan
nakarecord kay bank. Kasi nag aadjust nga tayo
from book to bank. Kung nakarecord si
outstanding check sa book as deduction, dapat
ibalik siya sa bank. Kaya siya nagiging add. The
same thing as deposit in transit, eto kasi
nakarecord as addition sa iyo pero dahil hindi
naman siya anakrecord kay bank. Kailangan
iminus mo siya sa iyo para ma adjust siya sa
amount ni bank.)