Question

Brangelina Adoption Agency's general ledger shows a cash balance of $4,574. The balance of cash in the March-end bank statement is $7,307. A review of the bank statement reveals the following information: checks outstanding of $2,784, bank service fees of $66, and interest earned of $15. Calculate the exact balance sheet

Answer 1

Answer:

Reconciliation of balances

Balance as per cash records =                                      $4574

Add: Checks issued but not yet paid i.e outstanding  $2784

Less: Bank service fee                                                       $66

Add: Interest earned                                                          $15

Balance as per Bank Statement                                    $7307

 

OR

Balance as per Bank Statement                                    $7307

Less: Checks issued but not paid yet                           $2784

Add: Bank service fee not charged in gen ledger           $66

Less: Interest earned not accounted in gen ledger        $15

Balance as per ledger                                                      $4574  

Discrepancy in ledger accounts balance and bank statements arises on account of various reasons. Many a times, a business issues checks and immediately deducts them from the ledger. But some of the checks may not get encashed by the receiver before the end of the month.

Also, the bank charges and interest credit by the bank does not get recorded in the ledger.