Republic of the Philippines

Enrichment Activities: Department of Education

Region III
What are the three (3) Steps in bank reconciliation process. Schools Division Office of Bulacan
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Step 1_________________________________________

Step 2 ________________________________________

Step 3 ________________________________________ FUNDAMENTALS OF ACCOUNTING

BUSINESS AND MANAGEMENT 2

References:

Fundamentals of Accountancy Business and Management 2

Published by the Commission on Higher Education, 2016
Bank Reconciliation
Chairperson: Patricia B. Licuanan, Ph.D.
Commission on Higher Education Statement
Teachers Guide

K to 12 Transition Program Management Unit

Office Address: 4th Floor, Commission on Higher Education,
C.P. Garcia Ave., Diliman, Quezon City
ACTIVITY SHEET
(1) Valencia, et. al. Basic Accounting 3rd
edition 2009-2010, Valencia Educational Supply, 2009.
NAME:
(2) Weygandt, J. et. al. Accounting
Principles 2010 edition. John Wiley and Sons. GRADE AND SECTION:
(3) Valix, Conrado T. et. al. Financial
DATE OF SUBMISSION
Accounting Volume 1 2015 editions. GIC Enterprises & Co. Inc. 2015

(PAGE 1)

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I. OBJECTIVES Post test
6. If the bank charged for the check plus a bank fee for the checks
A. Content Standards with insufficient balance this called.
a. Not sufficient fund c. No fund
The learners demonstrate an understanding of a bank b. Refund d. All of the above
reconciliation statement, its nature and structure, and 7. Adjusting the bank balance and book balance are the bank
reconciliation process.
reconciling items and methods of preparation
a. True b. False
B. Performance Standards: 8. If a check have been written and recorded in the company's Cash
account but have not yet cleared the bank account this is called.
The learners will be able to solve exercises and problems a. Check balance c. Outstanding balance
involving the following: b. Outstanding checks d. All of the above
9. Amounts already received and recorded by the company, but are
1. Identification of the proper treatment of reconciling items not yet recorded by the bank.
in the bank reconciliation statement a. Cash in c. Cash balance
b. Deposit in transit d. Deposit in bank
2. Preparation of a bank reconciliation statement 10. Deposits in transit an increase to the balance per bank in order to
report the true amount of cash.
C. MELCs: a. True b. False
Describe the nature of bank reconciliation statement 11. Bank balance is adjusted to agree with book balance.
Analyze the effect of the reconciling items a. Adjusted method c. book to bank method
Prepare a bank reconciliation statement. b. bank to book method d. all of the above
12. The book balance is adjusted to agree with the bank balance.
a. Adjusted method c. book to bank method
D. Specific Objectives: b. bank to book method d. all of the above
To identify and understand the contents of a bank
statement 13. The balances per bank and per book are separately determined.
a. Adjusted method c. book to bank method
b. bank to book method d. all of the above
II. CONTENT
14. Monthly preparation of bank reconciliation assists in the regular
monitoring of cash flows of a business.
a. True b. False
15. Methods of adjusting bank reconciliation are;
a. Adjusted method c. book to bank method
b. bank to book method d. all of the above
 Lesson 1 – Bank Reconciliation
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Statement (Page 15)
E. REFLECTION: III. PROCEDURES:
A. Preliminary Activities
Identify common reconciling items and their 1. Pre-Test
effects. MULTIPLE CHOICE. Read the following items carefully. Encircle the
letter of the correct answer.
V. ASSESSMENT (Post Test)
1. What will the company do, upon receipt of the bank statement?
MULTIPLE CHOICE. Read the following items carefully. a. File the statement c. Throw/Discard
Encircle the letter of the correct answer. b. Review d. Check and compare with records
2. If a report compares bank statement balance as per accounting
1. What 24 hour teller machine can withdraw funds
records with the balance stated in the bank statement.
anytime.
a. Bank reconciliation Statement c. Book balance
a. Machine teller c. Automated machine
b. Bank balance d. Cash Balance
b. Automated teller machine c. All of the above
3. A check issued to Meralco by the company to P3,500 and
c.
recorded this as P 350 this case will cause difference between
2. Which written slip are used to take out money from
company’s record and the bank record is called.
the bank.
a. Arrears c. Bank errors
a. Withdrawal c. Cash slip
b. Errors d. Book errors
b. Withdrawal slip d. Deposit slip
4. The most vulnerable assets of an entity.
c.
a. Cash c. bank draft
3. If a cash account result from the company entering an
b. Bank withdrawals d. bank debts
incorrect amount, entering a transaction that does not
5. The most commonly used methods in preparing bank statement.
belong in the account.
a. Bank to book c. Book to bank
a. Errors c. Charges
b. Adjusted method d. All of the above
b. Interest d. All of the above 6. The situation wherein the cash collected will not be reflected in
4. If the balance increases the company's cash account on the bank as deposit but it is however recorded in accounting
its books this is called. records of the company.
a. Interest c. Earnings a. Time out c. Time lags
b. Interest earned d. All of the above b. Time in d. No time
7. Preparation of bank reconciliation helps in the identification of
5. The bank deduct charges or fees on the bank statement errors in the accounting records of the company or the bank.
without notifying the company. a. True b. False
a. True b. False
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 ( Pre test)
8. Monthly preparation of bank reconciliation assists in the 4. ACTIVITY D
regular monitoring of cash flows of a business. Prepare a bank reconciliation statement.
a. True b. False 1. The bank statement for August 2014 shows an ending
9. The bank reconciliation method wherein the book balance of Php3,490.
balance is adjusted to agree with the bank balance. 2. On August 31 the bank statement shows charges of Php35
for the service charge for maintaining the checking account.
a. Book to bank b. Bank to book
3. On August 28 the bank statement shows a return item of
c. adjusted method d. All of the above Php100 plus a related bank fee of Php10. The return item is a
10. It is normal for a company's bank balance as per customer's check that was returned because of insufficient funds.
accounting records to differ from the balance as per bank 4. The bank statement shows a charge of Php80 for check
statement. printing on August 20.
a. True b. False 5. The bank statement shows that Php8 was added to the
11. Amounts already received and recorded by the checking account on August 31 for interest earned by the
company, but are not yet recorded by the bank. company during the month of August.
a. Bank Deposit c. Deposits in transit 6. The bank statement shows that a note receivable of
b. Cash in Bank d. Cash on hand Php1,000 was collected by the bank on August 29 and was
deposited into the company's account. On the same day, the bank
12. Checks that have been written and recorded in the
withdrew Php40 from the company's account as a fee for
company's Cash account but have not yet cleared the bank collecting the note receivable.
account or presented to the bank by the payee. 7. The company's Cash account at the end of August shows a
a. Cheque c. Post dated checks balance of P 967.
b. Outstanding checks d. All of the above 8. During the month of August the company wrote checks
13. Bank recording an incorrect amount, entering an totalling more than Php50,000. As of August 31 Php3,021 of the
amount that does not belong on a company's bank checks written in August had not yet cleared the bank and Php200
statement. of checks written in June had not yet cleared the bank.
a. Bank memo c. bank service 9. The Php1,450 of cash received by the company on August
b. Bank errors d. bank overdraft 31 was recorded on the company's books as of August 31.
14. Accepting deposits, - posting checks, mailing the bank However, the Php1,450 of cash receipts was deposited at the bank
on the morning of September 1.
statement are examples of bank.
10. On August 29 the company's Cash account shows cash
a. bank account c. bank service charge sales of Php145. The bank statement shows the amount deposited
b. bank memo d. bank debit memo was actually Php154.
15. The acronym of non sufficient funds. 11. The company reviewed the transactions and found that
a. NSF c. SFN Php154 was the correct amount.
b. FSN d. All of the above
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C. INDEPENDENT ACTIVITIES: 2. Reviewing Previous Lesson:
3. ACTIVITY C
1. Differentiate a savings account from a current or checking
Identify whether the following independent account
transaction is a book or a bank reconciling. In addition, 2. Prepare bank deposit and withdrawal slips
determine the amount of the error and state whether 3. Prepare checks
the amount will be added or deducted in the 4. Understand the contents of a bank statement.
preparation of the bank reconciliation(use adjusted
method): B. Presenting the new lesson

1. Eagle Repairs received P1,500 from Jane. The bookkeeper Nature of Bank Reconciliation Statement
recorded the amount as P500.
2. The deposits of Eagle earned interest of P100 for the Bank reconciliation statement is a report which compares
month. Eagle does not have knowledge of the bank balance as per company's accounting records with
interest earned until it receives the bank statement the balance stated in the bank statement.
3. The bank teller deducted CK 123 for P3,500 from the The two common causes of the discrepancy in figures
account of Eagle. The said check was issued by Egles are:
Company a different depositor of the bank.
Time lags that prevent one of the parties (company or the
4. The bookkeeper of Eagle recorded Check No. 345 in the bank) from recording the transaction in the same period as
Cash Disbursement Journal as P5,205. the other party.
The correct amount of the check was P5,250.
Errors by either party in recording transactions
5. Nation Bank collected from the customer of Eagle the sum
of P5,000 representing payment of the said customer to The importance of Bank Reconciliations are as
Eagle. No entry was made in the books of Eagle.
follows:
• Preparation of bank reconciliation helps in the identification
of errors in the accounting records of the company or the
bank.

• Cash is the most vulnerable assets of an entity.

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 • If the bank balance appearing in the accounting records
2. ACTIVITY B : (Written Work / Task)
can be confirmed to be correct by comparing it with the bank
statement balance, it provides added comfort that the bank
The cash receipts journal of Masaya Merchandising
transactions have been recorded correctly in the company
reflected the following collections for the month of
records.
April 2016:
• Monthly preparation of bank reconciliation assists in the
regular monitoring of cash flows of a business.
Date Official Customer Amount
ACTIVITY Receipt
5/2/2019 4171 Joy 4,000
5/8/2019 4172 Aliah 2,000
1. Motivation
5/9/2019 4173 Andrea 8,900
GUESS THE BANK 5/25/2019 4174 Angela 7,800
5/26/2019 4175 Alpha 3,200

It is the policy of the company to deposit collection within the

following day from the date of collection.

The bank statement for April 2016 revealed following deposits

made.

Deposit Date Amount

1.________ 2.___________3.__________ 4. _________5.____________ 5/3/2019 4,000
5/9/2019 2,000
5/10/2019 8,900
5/26/2019 7,800
5/26/2019 3,200

Instruction: Compute for the deposit in transit or undeposited

collection as of end of April 2019.

6.________________7._____________8._______9.___________

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 ANALYSIS:

Processing questions:

A. “Upon receipt of a bank statement, what will the

company do?”
B. What are the contents of a bank statement?
C. What is the purpose of a bank statement?

3. ABSTRACTION (Discussion of the Topic)

The most common format of a bank reconciliation

C. INDEPENDENT ACTIVITIES (Formative) statement is shown below:
1. ACTIVITY A
RSS COMPANY
For the month of May 2019, Pet Company issued the following BANK RECONCILIATION STATEMENT
April 30, 2020
checks as recorded in its Cash Disbursement Journal:
Unadjusted Book balance P xx Unadjusted Bank Balance P xx
Check Date Check No. Payee Amount Bank Debit Memo Deposit in Transit xx
5/2/2019 3456 Jaja 2,000 NSF Check xx
5/10/2019 3457 Paula 300 Printing Charge xx
5/15/2019 3458 Coleen 4,500 Bank Credit Memo
Collection xx
5/18/2019 3459 Sofia 8,700 Errors xx Outstanding Checks xx
5/30/2016 3460 Franches 1,200 Adjusted Book Balance xx Adjusted Bank Balance xx

As per the bank statement received by Pet, the following The key terms to be aware of when dealing with a bank
checks were presented and paid by the bank. reconciliation are:
• Deposits in transit are amounts already received and
Check No. Payee Amount recorded by the company, but are not yet recorded by the
3456 Jaja 2,000 bank.
3459 Sofia 8,700 ( Page 7)
3460 Franches 1,200
3. Discussion of the Topic: (ABSTRACTION) 3. Discussion of the Topic: (ABSTRACTION)
The cost of the printed checks will automatically be deducted
Outstanding checks are checks that have been written from the company's checking account.
and recorded in the company's Cash account but have
not yet cleared the bank account or presented to the Interest earned will appear on the bank statement when a bank
bank by the payee. gives a company interest on its account balances. The amount
is added
• Bank errors are mistakes made by the bank. Bank to the checking account balance and is automatically on the
errors could include the bank recording an bank statement.
incorrect amount, entering an amount that does not
belong on a company's bank statement, or Notes Receivable are assets of a company. When notes come
omitting an amount from a company's bank statement. due, the company might ask its bank to collect the notes
receivable. For this service the bank will charge a fee.
Bank service charges are fees deducted from the bank • Errors in the company's Cash account result from the
statement for the bank's processing of the checking account company entering an incorrect amount, entering a transaction
activity that does not belong in the account, or omitting a transaction
Examples: that should be in the account.
- accepting deposits,
- posting checks,
- mailing the bank statement,
Other types of bank service charges include the fee charged
when a company overdraws its checking account and the bank
fee for processing a stop payment order on a company's check.

NSF check is a check that was not honored by the bank of the
person or company writing the check because that account did
not have a sufficient balance. As a result, the check is returned
without being honored or paid.

Check printing charges occur when a company arranges for its

bank to handle the reordering of its checks.
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