Assignment
Complete the following assignment and submit it to the Reconciling the Bank Statement Dropbox.
This assignment is 20 points.
Part 1:
- When is a stop payment order generally issued?
- All checks received from customers are deposited into the company’s bank account. If a customer gives the company a check that is not good—non sufficient fund (NSF) check (also called a dishonored or bounced check), then the bank notifies the company. Explain how this affects the accounting system. In your answer, identify if Cash in Bank and Accounts Receivable are either increased or decreased because of a non sufficient fund check.
- If you were to prepare a general journal entry for the NSF check described above, what account would you Debit? What account would you Credit?
Part 2:
Write an explanation of the potential causes for a discrepancy between the balance of the Cash in Bank account and the checkbook balance.
Guidelines:
- Why would the Cash in Bank account in the ledger be different from the bank statement balance?
- Explain outstanding checks.
- Explain outstanding deposits.
- Explain bank service charges.
- It should be no longer than one hundred fifty words.
Click here to see how your assignment will be graded.