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General Accounting Discussions: Bank Reconciliation homework problem

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    I need help with a homework problem...1. For each of the following items, indicate whether its amount (i) affects the bank or book side of
    a bank reconciliation and (ii) represents an addition or a subtraction in a bank reconciliation:
    a. Outstanding checks
    b. Debit memos
    c. NSF checks
    d. Unrecorded deposits
    e. Interest on cash balance
    f. Credit memos
    g. Bank service charges
    2. Which of the items in part 1 require an adjusting journal entry
    I think I may be getting the bank and book side mixed up so can anyone help...here are my answers so far...
    a. Bank side---subtract
    b. Book side--subtract
    c. Book side---subtract
    d. Bank side—add
    e. Book side—add
    f. Book side-add
    g. Bank side---subtract
    • CommentAuthorabril
    • CommentTimeJun 2nd 2007
     
    you got most of the answers correct except this two..

    d. Unrecorded deposits > book side, add.. unrecorded deposits means, you deposited cash in your account buy havent recorded it yet in your book.

    g. Bank service charges > book side, subtract.. the bank has already deducted this to your account so its your book that needs adjustments.

    to know whether an adjusting entry is needed is very simple > all items that affects YOUR BOOK needs adjustments.
    that's because its your obligation to correct YOUR record. on this problem, those items that has "book side" answer in it need adjusting entry. items that affects the bank record need no adjustment because that the bank's record not yours.
    Thankful People: YAMA
  3.  
    I agree with the abril because he explained this problem very nicely!

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