Explain the closing entry process and prepare the closing entries in journal for

Question

Explain the closing entry process and prepare the closing entries in journal form based on the information in question 1.

POST INC. BANK RECONCILIATION

Cash balance per bank                                                                                                            $8,200

Cash balance per books (general ledger)                                                                               $6,500

Outstanding checks                                                                                                                $2,460

Check mailed to the bank for deposit had not reached the bank by the statement date.             $500

NSF check returned by the bank for accounts receivable                                                     $100

July interest earned on the bank statement                                                                            $20

Check no. 700 for misc. expense cleared the bank for $200; erroneously recorded            in our books for $20                 

~ Prepare a bank reconciliation.                  

~ Shown the accounting entries that must be made by

~ Matrix Inc. in journal entry and T-Account format.

Explanation / Answer

Prepare a bank reconciliation.   

Cash balance per bank                                                                                               $8,200

Add: Check mailed to the bank for deposit had

not reached the bank by the statement date. $500

Add: NSF check returned by the bank for accounts receivable                 $100

Add:Check no. 700 for misc. expense cleared the bank for $200;

erroneously recorded in our books for $20       $180

Less:July interest earned on the bank statement                $20

Less:Outstanding checks                   $2,460   

Cash balance per books (general ledger)                                                                              $6,500

the accounting entries that must be made by

~ Matrix Inc. in journal entry for following transaction

NSF check returned by the bank for accounts receivable                 $100

Account recievable a/c Dr 100

To Bank A/c 100

( Being reverse entry passed due to check return)

Check no. 700 for misc. expense cleared the bank for $200;

erroneously recorded in our books for $20

MiscExpenses A/c Dr 180

To Bank 180

(Being the balnce amount not recorded ha been recognised)

  

July interest earned on the bank statement                $20

Bank A/c Dr 20

To Interest recieved a/c 20

( being bank interest earned)

Bank A/c in T format

Remaining entry are correct which are not to be rectified and which will remain in reconcilation

Bank A/c (in books) Particular Amount Particular Amount To balance b/d 6500 By Account recievable 100 To Interest 20 By Misc Exp 180 By Balance C/d 6240 6520 6520

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