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Dear Mr. John, thank you for your answering..
1. I watched your lecture about bank reconciliations
and you said the balance on the bank statement $15.000 is +$15.000
because it is on CR.
Then, if the bank statement showed overdraft of -$800,
it is on DR from our business’ perspective?2. In BPP rivision kit 16.5,
Why (3) The bank has credited the account in error with $425…
goes to the bank statement, instead of CASH BOOK?
for example, (2) Bank charges $550… goes to cash book.
I thought only outstanding lodgements and unpresented cheques goest to the bank statement..1. On the bank statement, an overdraft will be shown as a debit balance.
(But it will be a credit balance in the t-accounts of the business)
I do stress this in the lectures and explain why the bank seems to show it the ‘wrong’ way round – there is a logic to it 🙂2. If the bank has made a mistake then the balance on the bank statement is wrong and needs correcting.
We only need to correct in the cash account if we have made a mistake in the cash account.
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