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DESCRIBE the types of journal entries that will result from preparing a bank reconciliation.

DESCRIBE the types of journal entries that will result from preparing a bank reconciliation.

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Answer #1

In bank reconciliation there are some adjusments entries are required to match the balance per bank. thses adjusments are those items which appears on the bank statement but not recorded in compny's general ledger accounts. Generally the adjusments have the bank service charge for maintaining the account, check printing charges, fees for returned checks, and interest earned etc.

The journal entries for the bank fees would be

Bank Service Charges (debit)

Cash (credit)

The journal entry for a customer's check that was returned due to insufficient funds will

Accounts Receivable (debit)

  Cash (credit)

Interest earned by the company will be recorded with

Cash (debit)

Interest Revenue (credit)

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