On December 31, 2020, TEJ Company had a cash balance per books of $8,664. The statement from DUABI Islamic Bank on that date showed a balance of $15,900. A comparison of the bank statement with the Cash account revealed the following facts.

1. NSF check of customer returned by bank $4,200
2. Check No. 210 was correctly written and paid by the bank for $593. The cash payment journal reflects an entry for Check No. 210 as a debit to Accounts Payable and a credit to Cash in Bank for $539.
3. Bank service charge for December was $100.
4. A payment on account was incorrectly entered in the cash payments journal and posted to the accounts payable subsidiary ledger for $824 when Check No. 318 was correctly prepared for $284. The check cleared by the bank in December.
5. The bank collected a note receivable for the company for $3,000 plus $100 interest revenue.
6. Checks written in December but still outstanding $8,000.
7. Checks written in November but still outstanding $5,150.
8. Deposits of December 29 and 30 not yet recorded by bank $5,200.

Required:

1. Prepare a bank reconciliation statement at September 30 for TEJ Company.
2. Explain the need and importance of the bank reconciliation

Answer:

bank reconciliation statement: