Free Solved The Checkbook and the general journal indicated that Check 2206 dated April 17 was issued for $695 to make a cash purchase of supplies.


Screenshot 2024 01 12 135540

Free Solved The Checkbook and the general journal indicated that Check 2206 dated April 17 was issued for $695 to make a cash purchase of supplies.

Screenshot 2024 01 12 135540

Step 1 of 3

In the problem, the discrepancies in the amounts recorded in the checkbook and general journal, compared to the actual amounts reflected on the canceled checks and banks statements is given.

It is asked to prepare the adjusted book balance section of a bank reconciliation statement and provides instructions for making general journal entries to correct the errors in the accounting records.

An individual’s or company’s accounting records and the bank statement are compared and reconciled using a bank reconciliation statement, a financial document. It assists in guaranteeing that the financial transactions processed by the bank correspond with those documented in the accounting books. A bank reconciliation statement’s primary goal is to find and fix inconsistencies, such as missing transactions, mistakes, or timing discrepancies, in order to guarantee the accuracy of financial records.

Explanation:

Information and instructions related to a bank reconciliation process and the correction of errors in a company’s financial records is given . error have to identify and calculate the adjusted book balance, and providing general journal entries to correct the mistakes in the accounting records.

 

Step 2 of 3

Bank reconciliation statement is prepared as –

“A Fontees”
Bank reconciliation statement on 31 April 2019
Particular Amount
Balance in books $20275
+ Incorrect recording of check 2206 $681
– Incorrect recording of check 2234 $34
Adjusted Book balance $20,922

Working Note –

1) Incorrect recording of check 2206 – The checkbook indicated $695 , but the actual amount was $14 So, subtract the difference so subtract the difference : $695−$14=$681.

2) The checkbook indicated $130, but the actual amount was $164. So, subtract the difference: $164−$130=$34.

Explanation:

The adjusted book balance in a bank reconciliation is determined by applying the principles of bank reconciliation, specifically the principle of correcting errors and omissions in the company’s accounting records.The principle behind this is to make sure that the company’s records accurately reflect the actual financial transactions. Any discrepancies or errors between the recorded transactions and the actual transactions are corrected in the bank reconciliation, ensuring the accuracy of the company’s financial records.

 

Step 3 of 3

2) Journal entry to correct the errors as follows –

Date Account Dr Cr
2019-04-30 Supplies A/c Dr $681
To Cash A/c $681
( Being the overstatement of check 2206 is corrected)

 

Date Account Dr Cr
2019-04-30 Utilities Expenses A/c $34
To Cash A/c $34
( Being correction entry for check 2247 is recorded)

Working Note

  • For Check 2206:

Debit: Supplies for$681(to decrease the supplies account to its correct amount).

Credit: Cash for $681(to reduce the cash account to its actual amount).

 

  • For Check 2247:

Debit: Utilities Expense for $34(to increase the expense to its correct amount).

Credit: Cash for $34 (to decrease the cash account to its actual amount).

Explanation:

The above journal entries is prepared to correct the errors and reflect the accurate financial position in the company’s records.

 

Final solution

1) So, the adjusted book balance is $20,922.

2) General journal entries to correct the errors, has been prepared.

 

 

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