Answer:
Bank Reconciliation Statement:
Calculation of Adjusted cash Balance on 31 May:
Cash Balance: $ 29,300
less: Bank Charges $ (190)
less: NSF Check <u> $ (420)</u>
Adjusted cash Book Balance $ 28,690
Add: Outstanding Checks $ 6,500
Less: Uncleared Checks <u>$ 7,100</u>
Revised Cash Book Balance (A) <u>$ 28,090</u>
Bank Statement Balance $ 27,600
Add: Error by Bank <u>$ 490 </u>
Adjusted Bank Balance (B) <u>$ 28,090</u>
Explanation:
Bank reconciliation is a company document prepared in order to reconcile difference between balance as per cash book and balance as per bank statement.
The difference arise because of two reasons:
- Timing differences (Outstanding checks and Uncleared checks
- Error and Omissions. (Bank charges -NSF)
