ZIMSEC O Level Principles of Accounts Notes: Bank Reconciliation Statement Overdraft Example

The following is the cash book (bank columns) of F Kureva for December 20X7:

DrCash BookCr
DateDetailsAmount($)DateDetailsAmount($)
Dec 6P Paradza230Dec 1Balance b/d1900
Dec 20C Choto265Dec 10J Ranganai304
Dec 31W Banda325Dec 19P Moyo261
Dec 31Balance c/d1682Dec 29K Chatindo37

2502

2502

The bank statement for the month is as follows:

20x7Dr($)Cr($)Balance($)
Dec 1Balance1900 O/D
Dec 6Cheque2301670 O/D
Dec 13J Ranganai 3041974 O/D
Dec 20Cheque2651709 O/D
Dec 22P Moyo2611970 O/D
Dec 30T Mufore: Standing Order942064 O/D
Dec 31F Ramba: ZIPIT1021962 O/D
Dec 31Bank charges722034 O/D

Required:

  1. Write the cash book up to date to take the necessary items into account, and
  2. Draw up a bank reconciliation statement as on 31 December 20X7

Solution

  • Here is what the updated cash book should look like
DrCash Book (Updated)Cr
DateDetailsAmount($)DateDetailsAmount($)
Dec 6P Paradza230Dec 1Balance b/d1900
Dec 20C Choto265Dec 10J Ranganai304
Dec 31W Banda325Dec 19P Moyo261
Dec 31F Ramba102Dec 29K Chatindo37
Dec 31Balance c/d1746Dec 30T Mufore94
Dec 31Bank Charges72

2502

2668

  • Now the reconciliation statement
Bank Reconciliation Statement as at 31 December 20X7$
Overdraft as per Cash Book(1746)
Add Unrepresented cheques: K Chatindo

37

(1709)
Less uncredited lodgments: W Banda(325)
Overdraft/Balance as per bank statement

(2034)

  • As you can clearly verify the obtained bank balance at the end is similar to the balance shown on the bank statement
  • You can consider the two balances to be reconciled at this stage

To access more topics go to the Principles of Accounting Notes.

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