Report on the Bank Reconciliation Statement

The bank reconciliation statement is representing reconciliation of suspense and control accounts. According to the theory, suspense accounts are the accounts in which a company add some temporary transactions until they identify the actual source or proper details of transactions. After identifying the actual details of the transactions company make record that transactions in the General Journal and pass entries to the General Ledger. The reconciliation statement assist the accountants and financial officers to reach actual balance for the selected time duration to be recorded in the financial statements.

In the above bank reconciliation statement, the suspense and control accounts related changes are made to ensure matching of the bank amount with the company’s statement. All issued by not presented amounts are added in the ‘minus amount” column of the Bank reconciliation statement. For instance, the amount of 87,600. While the amount related to cheques not sent to bank are added in the first column “Plus column” of the bank reconciliation statement. Thus, the value of OMR 2,40,850 equal to both sides of bank reconciliation statement represent the accuracy of this statement for the company.

Control Accounts: The control accounts are used in the organizations for the recording of balance about a number of subsidiary accounts and ensure cross checking of these accounts. For instance, the cash payment of 8,800 presented in control account had the following General Journal Entries and Ledger Entries:

Journal entries:

Breaking down cash transaction of 8,800 for purchases.

Ledger entries:

Dr.                                                  Cash Control A/C                                       Cr.

                                                Bank Control A/C

                                         Discount Received Control A/C

                                         Purchases Returned Control A/C

                                              Payable Control A/C

                                                       Suspense A/C

Rectifying Journal Entries: In the transaction one, the source is unknown therefore we will consider it a suspense account for the time being. The unidentified cash (received from unknown party) is related to the suspense account in which company will pass entry of this amount by debiting the cash account (assets) and stating suspense account as credit with $500. See the following General Journal entry for suspense account.