You are a Junior Accountant trainee in an accountancy firm which serves a number of clients with different financial needs. At the end of your training period your line manager wants to assess your ability and knowledge in handling some of the main financial accounting issues regarding the process of preparing a bank reconciliations statement and reconciling the control accounts, in order to do so he asked you to conduct some tests to demonstrate your ability and to reflect the knowledge and skills you have gain during your training period.

In this test you have been asked to handle the following financial problems.

• Task 3

Your line manager has provided you with the following information:

Two different clients are facing regular monthly problems with matching the cash balance of the bank statement with the cash balance found on their business's records. For this, your line manager has asked you to help these clients to handle and solve this issue by performing bank reconciliations for these two businesses (A & B) by using the available information in table 4&5.

• Instructions: in this task you have to:

1. Apply the bank reconciliation process for business (A) for the month ended November.30.2019 by using information from table 4.
2. Apply the bank reconciliation process for business (B) for the month ended November.30.2019 by using information from table 5.
3. Demonstrate the use of deposit in transit, outstanding checks and Not Sufficient Funds (NSF) in the reconciliation process.
4. Show that the two bank reconciliations have been accurately prepared by using appropriate tools and techniques.
5. Check what accounts are affected in both general ledger accounts and balance sheets. This can be done through preparing the adjusting entries of the bank reconciliations or through listing the affected accounts and their effects on general ledger and balance sheets.

Table 4: Business (A) Available information for bank reconciliation

1	Business A's bank statement dated Nov 30, 2017 shows a cash balance of 22500.
2	The business's cash records on the same date show a balance of 21949.
3	Following checks issued by the business to its suppliers are still outstanding: No. 846 issued on Nov 29 400. No. 875 issued on Nov 26 95. No. 878 issued on Nov 29 375. No. 881 issued on Nov 30 86
4	A deposit of 2600 made on Nov 30 does not appear on bank statement.
5	Interest income earned on the business's average cash balance at bank was 1,007
6	A deposit of 341 was incorrectly entered as 143 in the business's cash records.
7	The bank collected a note receivable on behalf of the business. Amount received by the bank on the note was 3000. This includes 100 interest income. The bank charged a collection fee of 10
8	A NSF check of 2000 was returned by the bank with the bank statement.
9	The bank charged 100 as service fee.

Table 5: Business (B) Available information for bank reconciliation

1	The bank statement of business (B) company shows a balance of 12,000 on 31 Nov 2017
2	The businesss ledger shows a balance of 9488on the same date.
3	The following checks issued during the month of January have not yet been cleared by the bank. Check No: 201, Issue date: 15 Nov 2017, Amount 200. Check No: 212, Issue date: 19 Nov 2017, Amount 420. Check No: 216, Issue date: 25 Nov 2017, Amount 640.
4	An amount of 1880 sent to the bank for deposit on 30 Nov 2017 does not appear in the bank statement.
5	A note receivable amounting to 3,497 has been collected by bank for the business. The bank has charged 10 for the collection of note.
6	The bank statement shows that interest amounting to 100 has been earned on average account balance during Nov.
7	A check of 450 deposited by the business has been charged back as NSF.
8	An amount of 95 has been deducted by bank as service charges for the month of Nov.
9	The check no. 220 was issued to pay the business electricity. The check was in the amount of 105 but was erroneously recorded in the cash payments journal as 15.

1-Bank Reconciliation Company A

Bank Statement		Book Statement

1-Bank Reconciliation Company B

Bank Statement		Book Statement

Bank Reconciliation:

1-Find the Outstanding Checks:

2-What is the NFS Check:

3-Find the Deposit in transit:

4-Why did you +/-?