I need help with a homework problem...1. For each of the following items, indicate whether its amount (i) affects the bank or book side of
a bank reconciliation and (ii) represents an addition or a subtraction in a bank reconciliation:
a. Outstanding checks
b. Debit memos
c. NSF checks
d. Unrecorded deposits
e. Interest on cash balance
f. Credit memos
g. Bank service charges
2. Which of the items in part 1 require an adjusting journal entry
I think I may be getting the bank and book side mixed up so can anyone help...here are my answers so far...
a. Bank side---subtract
b. Book side--subtract
c. Book side---subtract
d. Bank side—add
e. Book side—add
f. Book side-add
g. Bank side---subtract

omsailogistic

LOL its very easy
use your one hand to represent BANK BOOK and other to represent FINANCIL BOOK...
now make this test.....put both hands at level position...and ask question from yourself
1 which side will be affected by the question and in which direction ie up or down
lets take a simple example
service charges...... are charged by bank but do not arise in financial records until reconciliation is made....
now if you are starting your reconciliation from bank balance......and wants to reach on book balance.....
see how service charges have had effected your bank book.....debit in bank statement means bank balance is reduced. the representing hand goes down from the level and in
order to bring both hands to level WE HAV TO REDUCE THE BOOK BALANCE.... now the both hands are at level again.
therefore we hav to follow same procedure again for next items

Since this is a homework for you i m not tellin all this time.....try it yourself once or twice
i will answer it later....

slh6582

Well I did your test that you told me, but I am still very confused. I am doing very good in this class so far and this is the first challenge I have had. It's probably very easy haha...What is wrong with me? I still got the same answers as I did before!

slh6582

ok so I think i may have figured it out...they are all on the book side except outstanding checks! Right?

slh6582

HAHA ok I take that back...unrecorded deposits is also affects the ank side!

omsailogistic

Since you have carried out the test...and it may be helpful to you. You can tally your answer in either of following situation:

Situation1 : if u had started with bank balance......the answer comes out should be equal to book balance

Situation 2 : if u had started with book balance......the answer comes out should be equal to bank balance

pree007

Remember ur debit is banks credit and vice versa
so keep on tallying u r balance with banks until u finish all the transactions and finally u get the balance of opponent u started with as explained in the form of two situations by omsailogistic.