(a) What is a Bank Reconciliation Statement? (b) Explain the following terms: (i) Bank Charges (ii) Standing order (iii) Credit Transfer (iv) Dishonoured Cheque (v) Unpresented cheque (vi) Uncredited cheque
Explanation
(a) Bank reconciliation Statement: -A bank reconciliation statement is a statement prepared by an account 4 holder; -It is prepared to bring the cash book balance (bank column) into agreement with the bank statement balance on a given date.
(b)(i) Bank Charges: These are amounts charged and debited to the customer's bank account;-They are for services rendered by the bank to its customers. (ii) Standing Order:-It is a written instruction to a bank by an account holder; -It authorizes the bank to make specific payments to named persons on specified dates.(iii) Credit Transfer: -It is an agreement between a firm and its customer; -The customer arranges with his bank to transfer an amount directly into the firm's bank account. (iv) Dishonoured Cheques: -These are cheques received from debtors and paid into the bank account; -These cheques were returned unpaid by the bank for various reasons. (v) Unpresented Cheques: -These are cheques issued by a firm to its creditors; -These cheques have not been presented to the bank for payment at the time the bank statement was prepared. (vi) Uncredited Cheques: -These are cheques received from customers and paid into the business bank account. these cheques have not been credited by the bank at the time the bank statement was prepared.