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GROUP 3E

FAC 1502-S1-2016
UNISA
BANK RECONCILIATION STATEMENT

[STUDY UNIT 8]
Prepared by: Ramashau Aluwani
2016-03-22

UNISA E-TUTOR: A. RAMASHAU FAC1502-S1-16 GROUP3E

MENU LIST

INTRODUCTION
BANK RECON
GOLDEN RULES
MUST DO EXERCISE
SELF ASSESSMENT CHECK-LIST
INSPIRATIONAL POEM

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UNISA E-TUTOR: A. RAMASHAU FAC1502-S1-16 GROUP3E

INTRODUCTION
Dear Honourable Members
Just a reminder the first assignment is due on the 30th March
2016. Make sure you submit on time.
I have prepared notes on Bank Recon as well as selected MUST
do previous exam question papers. Go through the notes and if
you require my assistance let me know.
Kind regards
Mr. Ramashau Aluwani
UNISA E-Tutor: FAC 1502 (Group 3E)
I will work hard until I dont have to introduce myself
Ramashau Aluwani
2016-03-22

UNISA E-TUTOR: A. RAMASHAU FAC1502-S1-16 GROUP3E

BANK RECONCILIATION
An entity which has a cheque account can arrange with the bank to issue a
bank statement at a regularly intervals, usually monthly.
The bank statement reflects all transactions on the clients account in the
books of the bank and usually shows the daily balance of the account.
The bank statement shows, among other things, the opening balance for
the period, bank transactions made during that period and the closing
balance at the end of that period.
Since bank statements made by the entity are also recorded in its cash
receipts and cash payments journals, the balance shown in the bank
statement should agree with the balance in the bank account in the books
of the entity. However, this is rarely the case.
Banks furnish their clients periodically (usually monthly) with a bank
statement.
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UNISA E-TUTOR: A. RAMASHAU FAC1502-S1-16 GROUP3E

REASONS WHY BANK STATEMENT DO NOT


AGREE WITH BANK ACCOUNT
Some of the reasons why the two balances do not agree
Outstanding cheques
These are cheques issued to suppliers during the statement period but which have
not yet been presented to the bank for payment
Outstanding deposits
These are deposits made by the entity during the statement period but which have
not yet been credited by the bank
Direct deposits
These are deposits made by customers directly into the bank account of the entity
Bank Charges
These comprise of service fees, cost of cheque books, commissions, ledger fees
Interest charged on overdraft
This is the cost of overdrawing the bank balance
Dishonoured cheques
These are cheques received from customers but which were not paid by their
respective banks because they do not have sufficient funds
Mistakes and omissions made by both the entity and the bank
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UNISA E-TUTOR: A. RAMASHAU FAC1502-S1-16 GROUP3E

REASONS LISTED CAN CLASSIFIED AS FOLLOWS


Entries in the cash receipts and cash payments journals but which
are not in the bank statement
Outstanding cheques
Outstanding deposits
Items in the bank statement but which are not in the cash receipts
and cash payments journals:
Direct deposits
Bank charges
Stop orders
Dishonoured cheques/Unpaid cheques (R/D)
Interest on overdraft
Items affecting both the bank statement and the cash receipts
and cash payments journals
Mistakes made by both the entity and the bank
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UNISA E-TUTOR: A. RAMASHAU FAC1502-S1-16 GROUP3E

PROCEDURE TO FOLLOW IN THE


RECONCILIATION PROCESS
If a bank reconciliation statement was completed for the previous
month the bank statement must first be compared with that bank
reconciliation statement to ascertain whether the outstanding
items and corrections have been done by the bank.
Compare items on the debit side of the bank reconciliation
statement with entries on the debit side of the bank statement and
credit entries on the reconciliation with credit entries on the
statement.
Compare the amounts in the cash receipts journal for the current
month with the entries on the credit side of the bank statement.
Compare the amounts in the cash payments journal for the current
month with entries on the debit side of the bank statement.
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UNISA E-TUTOR: A. RAMASHAU FAC1502-S1-16 GROUP3E

PROCEDURE TO FOLLOW IN THE


RECONCILIATION PROCESS (continued)
Adjust the cash receipts journal and the cash payments journal
with items which are in the bank statement but not in the cash
receipts and cash payments journals, for example, direct
deposits, bank charges and dishonoured cheques.
Use the totals obtained from the adjusted cash receipts and cash
payments journals to prepare the bank account.
Prepare a bank reconciliation statement using the outstanding
cheques and deposits and correct any mistakes made by both
the bank and the entity. Always start with the balance as per
bank statement. The final balance on the bank reconciliation
statement should agree with the balance of the bank account.

2016-03-22

UNISA E-TUTOR: A. RAMASHAU FAC1502-S1-16 GROUP3E

EXERCISE ON BANK RECON


Exercise 8.1- Study Guide Page 172-175
The bank reconciliation statement for June 20.0
and the CRJ, CPJ, Bank account and Bank
statement of Benson Traders for July 20.0.
Additional information
(a) S Swan and P Saxon are debtors of the business
(b) The deposit on 30/07/20.0 is in respect on rent
received.

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UNISA E-TUTOR: A. RAMASHAU FAC1502-S1-16 GROUP3E

EXERCISE 8.1

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BANK STATEMENT

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SOLUTION TO EXERCISE 8.1

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SOLUTION TO EXERCISE 8.1

Adjust the Cash

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SOLUTION TO EXERCISE 8.1


GENERAL LEDGER

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SOLUTION TO EXERCISE 8.1


BANK RECONCILIATION STATEMENT

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GOLDEN RULES

Transactions or corrections which the entity must react on, must be recorded in
the two cash journals (CRJ & CPJ) of the entity, e.g bank charges, interest, debit or
stop orders, errors in the books of the entity, stale cheques

Transactions or corrections which the bank must react on must be recorded in the
bank reconciliation e.g deposits not yet credited, unpaid cheques and errors made
by the bank to be corrected.

A favourable bank account balance is on the debit side of the bank account as well
as on the bank reconciliation statement

An unfavourable or overdrawn bank account balance is on the credit side of the


bank account as well as on the bank reconciliation statement
A favourable bank statement balance is on the credit side of the bank statement as
well as on the bank reconciliation statement.

An unfavourable or overdrawn bank statement balance is on the debit side of the


bank statement as well as on the bank reconciliation statement.
Remember : YOU GO BIG OR YOU GO HOME BEST OR NOTHING

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UNISA E-TUTOR: A. RAMASHAU FAC1502-S1-16 GROUP3E

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EXERCISES ON BANK RECON


PREVIOUS EXAM QUESTION PAPERS
QUESTION 1 (OCT-NOV 2013)
QUESTION 4 (MAY-JUN 2014)
QUESTION 1 (OCT-NOV 2014)
QUESTION 3 (MAY-JUN 2015)
QUESTION 2 (OCT-NOV 2015)
NB: Previous exam papers are accessible in the main-site under Official Study Material

STUDY GUIDE
EXERCISE 8.2 (PAGE 175-177)
REVISION EXERCISE 1 (PAGE 180-182)
REVISION EXERCISE 2 (PAGE 183-184)
REVISION EXERCISE 3 (PAGE 185-186)
REVISION EXERCISE 4 (PAGE 187)
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SELF ASSESSMENT TICKBOX


THIS IS AN OPPORTUNITY TO EVALUATE YOURSELF!
NO. TOPIC
STATUS TICK
1

STUDY UNIT 1 - 5

DONE

STUDY UNIT 6

DONE

STUDY UNIT 7

DONE

STUDY UNIT 8

DONE

STUDY UNIT 9

DONE

ASSIGNMENT NO. 1

DONE

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INSPIRATIONAL POEM
Change Your World
You cannot change the world,

But you can present the world with one improved person -

Yourself.
You can go to work on yourself to make yourself
Into the kind of person you admire and respect.

You can become a role model and set a standard for others.

You can control and discipline yourself to resist acting


Or speaking in a negative way

Toward anyone for any reason.

You can insist upon always doing things the loving way,

Rather than the hurtful way.


By doing these things each day,
You can continue on your journey

Toward becoming an exceptional human being.


by: Brian Tracy
2016-03-22

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WELL DONE, YOU ARE ON TRACK!!

THANK YOU
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