Answered: Discuss three reasons why it is…

Business

Accounting

Discuss three reasons why it is important for companies to prepare monthly bank reconciliations.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Bank Reconciliation Statement

As a commerce student, we all know that every business has to maintain a cash book to maintain all his cash and bank transactions. A cash book is a book which has two columns, one cash column and one bank column.

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When completing the bank reconciliation, Bank Service Charges would be: Subtracted from the Cash General Ledger Balance Subtracted from the Bank Statement Balance Added to the Cash General Ledger Balance Added to the Bank Statement Balance
What is the importance of regular bank reconciliations?
8, please read the question carefully and follow the instructions. thanks
Prepare any journal entries that should be made as a result of the bank reconciliation.
Which of the following is an appropriate reconciling item to the balance per bank in a bank reconciliation? a. Bank service charge b. Chargeback for NSF check c. Deposit in transit d. Bank interest
In preparing a bank reconciliation, outstanding checks are deducted from the balance per bank. added to the balance per bank. deducted from the balance per books. added to the balance per books.
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In the normal operation of business you receive a check from a customer and deposit it into your checking account. With your bank statement you are advised that this check for $775 is NSF. The bank also informs you that due to the amount of activity on your business account the monthly service charge is $75. During a bank reconciliation, you will: a. add both values from balance according to books. b. subtract both values from balance according to books. c. add both values from balance according to bank. d. subtract both values from balance according to bank.
A. What is a bank reconciliation and why is it important for companies to do it periodically?
The following is a list of activities that companies perform in relation to their receivables.Match each of the activities listed below with a purpose of the activity listed below. 1. Selling receivables to a factor. select a purpose Determine to whom to extend creditEvaluate the liquidity of receivablesMonitor collectionsAccelerate cash receipts from receivable when necessaryEstablish a payment period 2. Reviewing company ratings in The Dun and Bradstreet Reference Book of American Business. select a purpose Establish a payment periodEvaluate the liquidity of receivablesMonitor collectionsDetermine to whom to extend creditAccelerate cash receipts from receivable when necessary 3. Collecting information on competitors’ payment period policies. select a purpose Establish a payment…
If a company made a bank deposit on September 30 that did not appear on the bank statement dated September 30, in preparing the September 30 bank reconciliation, the company should: Multiple Choice Add the deposit to the bank statement balance. Skip the bank reconciliation this month. Add the deposit to the book balance of cash. Deduct the deposit from the bank statement balance. Deduct the deposit from the September 30 book balance and add it to the October 1 book balance.