Bank Reconciliation and Petty Cash Analysis Report - [University Name]

The assignment is a report that analyzes bank reconciliation and petty cash management. The report begins with a bank reconciliation statement, adjusting the bank balance and company records to arrive at a correct cash balance. It then discusses the importance of bank reconciliation for internal control, emphasizing its role in preventing fraud and identifying errors. The report includes journal entries for establishing a petty cash fund, recording expenses, and replenishing the fund. Finally, it calculates the ending petty cash balance. The report references relevant literature to support its findings.

Running head: BANK RECONCILIATION AND PETTY CASH
Bank reconciliation and petty cash
Name of the student
Name of the university
Author note

1BANK RECONCILIATION AND PETTY CASH
Table of Contents
1. Bank reconciliation statement.............................................................................................2
2. Importance of bank reconciliation statement for internal control.........................................3
3. Journal entries........................................................................................................................3
4. Petty cash balance at the end..................................................................................................4
References..................................................................................................................................5

2BANK RECONCILIATION AND PETTY CASH
1. Bank reconciliation statement
Ending balance per
bank statement $3,876.
35
Add:
cheque deposited
but not cleared by
bank
$75
Deposit not
recorded $700
Service Fees not
recorded $25 800.00
4,676.3
5
Deduct:
Wrong amount
cleared by the
company
10
cheque issued but
bot processed
529.
85
Outstanding cheque 1500 2,039.8
5
Correct cash
balance $2,636.
50
Ending balance per
company records $2,636.
50
Add:
Wrong amount
cleared by the
company
10
cheque issued but
bot processed
529.
85
Outstanding cheque 150
0 2,039.8
5
4,676.3
5

3BANK RECONCILIATION AND PETTY CASH
Deduct:
cheque deposited
but not cleared by
bank
$75
Deposit not
recorded $700
Service Fees not
recorded $25 800.00
Correct cash
balance $3,876.
35
2. Importance of bank reconciliation statement for internal control
Bank reconciliation is the crucial accounting process that is performed by the all sixes
of companies for matching the cash balances of bank with balance of the financial record of
company (Shah 2013). Reconciliation can identify and prevent the intentional fraud in
association with the errors by the bank tellers, employees, accountants and management. it
further assists in improving the collection procedure, identifying bank errors, preventing the
overdrafts and detecting the frauds (Maguire 2014).
3. Journal entries
GENERAL JOURNAL
Date Accounts Debit Credit
#1 Bank account Dr $
300.00
To acsh a/c $
300.00
To establish a petty cash fund
#2 Postages A/c Dr $
99.00
Office supplies A/c Dr $
32.00
Gasoline A/c Dr $
75.00

4BANK RECONCILIATION AND PETTY CASH
To petty cash $
206.00
To record expenses and
replenishment of petty cash
#3 Cash A/c Dr $
200.00
To petty cash $
200.00
To increase amount in petty cash
4. Petty cash balance at the end
At the end the petty cash balance will be = ($ 300 - $ 206) +$ 200 = $ 294

5BANK RECONCILIATION AND PETTY CASH
References
Maguire, K.A., 2014. Best Practices for Nonprofits' Internal Control Self-
Assessment. Advances in Management and Applied Economics, 4(1), p.41.
Shah, P., 2013. Financial Accounting. OUP Catalogue.