Time Tracer Ltd - Publishing

ACCOUNTING INSIGHT

2nd Edition by Edwin Olima FCCA

ISBN 0-9543820-1-3

 

 

 

 

 

 

 

 

 

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Most businesses have bank accounts  into which they pay their income and from which they pay their bills  etc. In this exercise The Company Ltd. has one bank account from which all transactions  are settled. These transactions need to be analyzed and summarized out as shown in the steps below:

 

BANK RECEIPTS

 

Step 1.     Get the bank pay-in slips  from your Work Pack, page 42 . These show what was paid into the bank.

 

Step 2.        Using the bank pay-in slips , list the bank receipts  in date order (see example below). Use the analysis paper  provided for bank receipts (Work Pack, page 45 to 49 ).

 

Mark each pay-in slip with an “E” once you have entered it on to your analysis paper . This avoids double counting .

 

 

Bank Receipts Analysis Example

 

DETAIL OF BANK RECEIPTS

ANALYSIS OF BANK RECEIPTS

Date

Number

Name

Amount

Sales Invoice Receipt

Interest

Other

Detail of Other

12/03/01

0001

M Smith

1175

1175

 

 

 

15/04/01

0002

K Kelly

  100

 

 

100

Share capital  in

10/06/01

 ---

B Bank

5

 

5

 

 

 

Step 3.         Look through the bank statement (Work Pack, page 44 )  for direct receipts in to the bank account (as opposed to those receipts deposited via the pay-in book in 1 & 2 above) and enter them onto the next empty rows of your list.

 

Step 4.      Now total the columns with money values in the last row.

 

 

BANK PAYMENTS

 

Step 1.        Locate the bank cheque book stubs  which should show details of cheques  drawn on the account (Work Pack, page 43 ).

 

Step 2.         Using the bank cheque book stubs , list the bank payments in date order (see example overleaf). Use the analysis paper  provided for bank payments (Work Pack, page 45 to 49 ).

 

Where the payment is for a purchase invoice, analyze it out in the “Purchase Invoices Paid” column (see example overleaf).  If you are not sure check your list of purchase invoices to see if it is listed.

 

Where a cheque is made for a sundry payment, ensure that you enter the detail of what the sundry payment was for in the last column.

 

Mark each cheque book stub with an “E” once you have entered it on to your analysis paper . This avoids double counting .

 

 

Bank Payments Analysis Example

 

DETAILS OF BANK PAYMENTS

ANALYSIS OF BANK PAYMENTS

Date

No

Name

Amount

Purchase Inv. Paid

Bank Chg.

Sundry

Detail of Sundry

14/03/01

5001

AB Ltd.

2350

2350

 

 

 

16/03/01

5002

IRS

500

 

 

500

Corporation tax

19/04/01

--

B Bank

9

 

9

 

 

 

 

Step 3.          Now go through the bank statement  (Work Pack, page 44 )  and list out the direct payments from the account (as opposed to cheques  drawn on the account) in a similar way to the way the cheques are listed above. Continue from the row after the last cheque.

 

Step 4.        Total up all the monetary columns in the last row.

 

 

 

Step 5.             Now summarize the bank account transactions (receipts & payments)  in the format below.

 

 

Bank Account  Summary

£’s

Balance brought forward from last year

Nil

Total bank receipts

 

Less: Total bank payments

(                   )    

Balance carried forward to next year

 

 

The above listing and analysis are the account of your bank transactions . This is how accountants compile the Bank Account  for the purposes of producing Financial Statements .

 

Compare your work to the one in the answer section at the back of the book.


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