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    Bank Recon and Petty Cash

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    Cyrus Mulope
    The document discusses bank reconciliation and petty cash. It provides steps for bank reconciliation including identifying deposits, checks, and errors to add or subtract from the bank and book balances. It also describes the bank reconciliation format and journal entries to record adjustments. For petty cash, it explains that a small cash fund is used for minor expenses and replenished regularly, with journal entries to initially set up the fund and later replenish it.

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    Bank Recon and Petty Cash

    Uploaded by

    Cyrus Mulope
    62 views3 pages
    The document discusses bank reconciliation and petty cash. It provides steps for bank reconciliation including identifying deposits, checks, and errors to add or subtract from the bank and book balances. It also describes the bank reconciliation format and journal entries to record adjustments. For petty cash, it explains that a small cash fund is used for minor expenses and replenished regularly, with journal entries to initially set up the fund and later replenish it.

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    Accounts Bank Reconciliation statement

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    bank-recon-and-petty-cash

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    The document discusses bank reconciliation and petty cash. It provides steps for bank reconciliation including identifying deposits, checks, and errors to add or subtract from the bank and book balances. It also describes the bank reconciliation format and journal entries to record adjustments. For petty cash, it explains that a small cash fund is used for minor expenses and replenished regularly, with journal entries to initially set up the fund and later replenish it.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    62 views3 pages

    Bank Recon and Petty Cash

    Uploaded by

    Cyrus Mulope
    The document discusses bank reconciliation and petty cash. It provides steps for bank reconciliation including identifying deposits, checks, and errors to add or subtract from the bank and book balances. It also describes the bank reconciliation format and journal entries to record adjustments. For petty cash, it explains that a small cash fund is used for minor expenses and replenished regularly, with journal entries to initially set up the fund and later replenish it.

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    Accounting Notes

    Bank Reconciliation, Petty Cash

    Bank Reconciliation:

    Step 1: Identify outstanding deposits and bank errors that need to be added to the current bank
    statement balance.
    Step 2: Identify outstanding checks and bank errors that need to be subtracted from the current
    bank statement balance.
    Step 3: Identify amounts collected by the bank (notes), amounts added to our balance by the bank
    (interest on account), and any errors made by the company, when recording the
    transactions, that need to be added to the current book balance.
    Step 4: Identify bank service charges, NSF checks, and any errors made by the company that
    need to be subtracted from the current book balance.

    Bank Reconciliation format:

    Bank Books
    Balance $X Balance $X
    Add: Add:
    Outstanding Deposits X Bank Collections X
    Bank Errors X Interest Revenue X
    EFT Receipts X
    Book Errors X
    Subtotal $X Subtotal $X
    Less: Less:
    Outstanding Checks X Service Charges X
    Bank Errors X NSF Checks X
    EFT Payments X
    Book Errors X
    Adjusted Bank Balance $X Adjusted Book Balance $X

    Amounts must balance

    Journal entries must be done to record all adjustments made to the book balance. For all of the
    adjustments made to increase the book balance cash will be shown as a debit in the entries. For
    all of the adjustments made to decrease the book balance cash will be shown as a credit in the
    entries.

    Page 1

    Student Learning Assistance Center, San Antonio College, 2004


    Accounting Notes
    Bank Reconciliation, Petty Cash

    Cash Short and Over

    Any differences between the cash register tape totals and the actual cash receipts is charged
    against the cash short and over account.
    If the ending balance of the account is a debit it is shown on the Income Statement as a
    miscellaneous expense.
    If the ending balance of the account is a credit it is shown on the Income Statement as Other
    Revenue.

    Journal Entry:

    For a cash shortage:


    Cash Actual cash received
    Cash Short and Over Difference
    Sales Revenue Cash register tape totals

    For a cash overage:


    Cash Actual cash received
    Cash Short and Over Difference
    Sales Revenue Cash register tape totals

    Petty Cash:

    Petty cash is a fund containing a small amount of cash that is used to pay for minor expenses.
    The amount of the petty cash fund is dependent on how much a company feels it needs to have on
    hand to pay for this expenses. The fund is replenished on a regular basis, normally at the end of
    the month unless it is necessary to replenish it sooner. The amount of the fund may be increased
    or decreased after it is setup, if necessary.

    Journal Entries:

    For the setup of Petty Cash:


    Petty Cash Amount o f fund
    Cash in bank Amount o f fund

    Page 2

    Student Learning Assistance Center, San Antonio College, 2004


    Accounting Notes
    Bank Reconciliation, Petty Cash

    Petty Cash:

    Journal Entries:

    For replenishment of petty cash:


    Office Supplies Amount spent
    Delivery Expense Amount spent

    Postage Expense Amount spent


    Misc. Expense Amount spent
    Cash in bank Total of receipts

    Page 3

    Student Learning Assistance Center, San Antonio College, 2004

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