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Hi Sir,
Please could you help me with the below question?
The following bank reconciliation statement has been prepared for a company:
Overdraft per bank statement $ 39,800
Add: Deposits credited after date $ 64,100
$103,900
Less: Unpresented cheques presented after date $ 44,200
Overdraft per cash book $ 59,700Assuming the amount of the overdraft per the bank statement of $39,800 is correct, what should be the balance in the cash book?
I don’t understand why the OD per bank statement wouldn’t start with negative 39,800? The answer in the book is $19,900 OD. I understand the statement has been prepared wrongly but the answer in the book has kept $39,800 as a positive…
Thank you
The answer is indeed 19,900 o/d. You are right that o/d balance should start with a negative amount. It must be a printing error. No need to worry.
When you produce the correct reconciliation you will start with a negative bank balance. However whether you show it with a minus sign, or put brackets round it, or just right overdraft against it doesn’t matter. All the matters is that you add and subtract the unpresented cheques and lodgements not yet credited the right way, and therefore end up with the correct final balance.
Have you watched our free lectures on bank reconciliations?
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