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Chapter - 13 Bank Reconciliation Statement

The document discusses bank reconciliation statements. It defines a bank reconciliation statement as showing the correct balance on a bank account by reconciling the balance in the business cash book with the balance on the bank statement. It notes that the balances may differ due to time differences between items recorded in the cash book and on bank statements. The uses of bank reconciliation statements are also outlined, including revealing the correct cash balance, ensuring the correct balance is reported, avoiding overdrafts, and discovering errors early. Finally, steps for preparing a bank reconciliation statement are mentioned.

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Falila Banu Shaikh
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200 views18 pages

Chapter - 13 Bank Reconciliation Statement

The document discusses bank reconciliation statements. It defines a bank reconciliation statement as showing the correct balance on a bank account by reconciling the balance in the business cash book with the balance on the bank statement. It notes that the balances may differ due to time differences between items recorded in the cash book and on bank statements. The uses of bank reconciliation statements are also outlined, including revealing the correct cash balance, ensuring the correct balance is reported, avoiding overdrafts, and discovering errors early. Finally, steps for preparing a bank reconciliation statement are mentioned.

Uploaded by

Falila Banu Shaikh
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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starter

Chapter - 13
OBEJECTIVES:

•Execute the concept of bank reconciliation


statement
•Evaluate the uses and steps of bank
reconciliation statement
Concept of bank reconciliation statement
A bank reconciliation statement shows the correct
balance on a bank account. A statement is prepared
periodically to ensure that the bank account in
business cash book matches the business bank
account shown on the bank statement.
The balance on the bank account in a cash book may not agree with
the balance on the bank statement at any particular date, this may
be because of:
Time difference – The delay between items recorded in
cash book and their appearance on the bank statement.
ACTIVITY: 1

• Spin the wheel……


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n
a io st ow
e b t di ate ba
i a ffe m nk
efin cil ent ca ren ent
D on em sh t f is
e c at bo rom
r st ok
n

dif ime
SPIN
en
ex ds g k.
e of

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car ban
v

Wh
G es
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en
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statement.
reconciliation
prepare bank
necessary to
Why it is

tekhnologic
Uses of bank reconciliation statement

They reveal the correct amount of the cash at bank. Without a reconciliation ,
the cash book and bank statement balances may be misleading.
They ensure that the correct bank balance is shown in the statement of
financial position.
They control unintended overdrawing on bank account can be avoided.
A surplus of cash at bank can be highlighted and invested to earn interest.
If reconciliations are prepared regularly, errors are discovered early.
How to prepare a bank reconciliation statement
ACTIVITY:2

• Who will be winner?????


• Group A or Group B???
Why bank gives statement to its customers?

To know correct amount To convince customers


A in bank of a customer B for more deposits

To have a good None of the


C image in the market D above
>
tekhnologic
Preparation of cash book provides the details
on:

Assets and Receipt and


A liabilities B payment
Income and Expenses and
C profits D losses
>
tekhnologic
Bank reconciliation statement is useful because:

Errors cannot be More errors are


A recognised B unidentified
Errors are
C discovered early D Both A and B

>
tekhnologic
Time difference means -

The delay The delay


A between expenses B between profits
The delay between
C Both A and B D the items recorded
>
tekhnologic
HOTS:

• How and why bank reconciliation statement is helpful for


financial statement. Justify.
Plenary:
Wrap up by learners.
Introduction next day class
THANK YOU

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