Question

Your sister receives the December bank statement (included at end of assignment). You reconcile that statement to your records. [TIP: Look over the bank statement first. If there are any unrecorded bank charges, they should be entered on the first screen of the reconciliation.1. True 2. False

Answer 1

Answer:

2. True

Bank charges are the various fees account holders are charged in respect of maintenance of the account along with any other charges incurred in respect of specific transactions (e.g. cheque clearance charges, fund transfer charges, collection charges, etc). Bank charges are charged directly to the customer account thereby reducing the bank balance shown in the bank statement. These charges are usually not recorded by the business until the bank provides the bank statement at the end of a month which is why balance as per bank statement may be lower than the cash book balance.