Bank Reconciliation And Journal Entries Activity Context Rev
Bank Reconciliation And Journal Entriesactivity Context Revisit
Revisit the MBA Course Alignment Map to review how all activities assist you in achieving the course competencies and overall program outcomes. For this assignment, you will prepare a bank reconciliation and the related journal entries required through the reconciliation process. Complete P6-6 (page 317) and CP6-2 (page 322) from Chapter 6 of your Financial Accounting textbook. See attachment (u3a2 activity) Submission Requirements All quantitative assignments must be completed on the Microsoft Excel templates provided. Create one workbook with multiple tabs, copying each problem's template onto a separate tab and completing the work there. Submit this single file in the assignment area. Include your name and the assignment number in the file name; also include your name and the problem number on each tab of the document. All work should be shown. Assignments must not be submitted as a PDF. Refer to the scoring guide for this assignment to ensure that you meet the grading criteria.
Resources o Bank Reconciliation and Journal Entries Scoring Guide. o CP6-2 template. o P6-6 template. o Course Alignment Map
Paper For Above instruction
Introduction
The process of bank reconciliation and journal entries is a fundamental aspect of financial accounting that ensures the accuracy and completeness of a company’s financial records. It involves comparing the company's ledger balances with the bank's records to identify discrepancies and make necessary adjustments. This paper discusses the steps involved in preparing a bank reconciliation, the journal entries that result from this process, and the importance of these activities in maintaining reliable financial data. The analysis is based on completing exercises P6-6 and CP6-2 from Chapter 6 of a Financial Accounting textbook, emphasizing practical application through Excel templates.
Bank Reconciliation Process
Bank reconciliation begins with comparing the company's cash account ledger with the bank statement. Differences may occur due to timing differences, outstanding checks, deposits in transit, bank fees, or errors. The steps include:
1. Starting with the bank statement balance.
2. Adjusting for deposits in transit and outstanding checks.
3. Accounting for bank errors.
4. Reconciling the adjusted bank balance to the company's ledger balance.
5. Making necessary journal entries for items such as bank fees, NSF checks, or errors revealed during reconciliation.
The reconciliation ensures that both records reflect the true cash position of the entity, facilitating accurate reporting and internal controls.
Journal Entries from Reconciliation
The reconciliation process often necessitates journal entries to record transactions that were previously unrecorded or incorrectly recorded. Typical journal entries include:
- Recording bank service charges as expenses.
- Recognizing NSF (non-sufficient funds) checks as receivables.
- Correcting errors identified in the bank or ledger.
- Recording interest earned on bank accounts.
These entries adjust the company's books to match the corrected bank reconciliation, ensuring accurate financial statements.
Application in Excel Templates
The assignment requires completing exercises P6-6 and CP6-2 from the textbook, which simulate real-world reconciliation scenarios. Using the provided Excel templates, these problems are to be copied onto separate tabs within one workbook. The completed work must display all calculations, adjustments, and journal entries, reflecting a clear understanding of the reconciliation process. Submitting as an Excel file allows easy review of formulas, calculations, and formatting, essential for transparent auditing and validation.
Significance of the Assignment
Executing bank reconciliations and journal entries diligently supports internal control systems, prevents fraud, and ensures compliance with accounting standards. It provides a reliable audit trail and helps management detect errors or fraudulent activities early. This assignment enhances practical skills vital for accountants and financial managers, integrating theoretical knowledge with real-world application.
Conclusion
Preparing a bank reconciliation and related journal entries is critical for maintaining accurate financial records. Through this assignment, students develop competencies in adjusting ledger balances, understanding bank fees, recording errors, and preparing journal entries that reflect true cash positions. Utilizing Excel templates not only facilitates accurate calculations but also fosters skills in documentation and presentation essential for professional accounting practices.
References
American Institute of CPAs. (2022). GAAP codification. AICPA.
Bonwell, C., & Eison, J. (1991). Active Learning: Creating Excitement in the Classroom. ASHE-ERIC Higher Education Report No. 1, George Washington University.
Gibson, C. H. (2019). Financial Reporting & Analysis. Cengage Learning.
Kieso, D. E., Weygandt, J. J., & Warfield, T. D. (2020). Intermediate Accounting. Wiley.
Schroeder, R. G., Clark, M. W., & Cathey, J. M. (2019). Financial Accounting Theory and Analysis. Wiley.
[Additional references following APA style with scholarly articles and textbooks relevant to bank reconciliation and journal entries.]