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Accounting, 4E ww w
Chapter 7 Notes

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.com .com h h b b .uob Bank Reconciliation: .uob w w ww ww

Step 1: Identify outstanding deposits and bank errors that need to be added to the current bank statement balance. m m to be subtracted from o om and bank errors h Step that the current .c 2: Identify outstanding .cchecks .coneed .com .com h h h h b b b b b bank statement .uob .uob balance. .uob .uob .uob w w w w w w to our balance by the Step 3: Identify added bank ww ww amounts collected by the wwbank (notes), amounts w ww (interest on account), and any errors made by the company, when recording the to be added to the current m book balance. m transactions, that need m o o o c c c . . . .com that .com Step 4: Identify bank service charges, NSF checks, and any errors made by the company h h h h h b b b b b obobobobobneed to be subtracted from the current w.u w.u w.u book balance. w.u w.u

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Subtotal Less: .com .com h h b b Outstanding Checks .uob .uob w w Bank Errors ww ww Adjusted .com Bank Balance bh.com h b .uob .uob w w ww ww

Balance w $X Add: m Collections X X .coBank .com h h b b X Interest Revenue X ob u .uob . w w EFT Receipts X ww ww Book Errors X $X Subtotal $X m o o Less: .c .c m h h b b X .uobService Charges X .uob w w w w X NSF Checks X w w EFT Payments X Book Errors X m $X .com Book Balancebh.co$X bhAdjusted

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Amounts must balance

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Accounting, 4E ww w
Chapter 7 Notes

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.com .com h h b b Over .uob Cash Short and .uob w w ww ww

Any differences between the cash register tape totals and the actual cash receipts is charged against the cash short and over account. m com com on the Income Statement If the ending balance of account is a debit it is .co .the .shown .com as a .com h h h h h b b b b b .uob miscellaneous expense. .uob .uob .uob .uob w w w w w w a credit it is shown on w w Income Statement as Other If the ending the ww ww balance of the account wis ww Revenue.

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.com Journal Entry: bh.com h b .uob .uob w w ww For w aw cash shortage:


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Actual cash received Difference om

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.com .com .com .com .com h h h h h b b b b b Petty cash is a fund to ob- for minor expenses..uob.uob .uob containing a small amount .uob of cash that is used .upay w w w w w The amountw of on how much a company feels it needs to have wthe petty cash fund is dependent ww ww ww ww on
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Petty Cash:

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.com Petty Cash .com h h b b bCash in bank .uob .uo w w ww ww


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Chapter 7 Notes

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