Fundamentals of

SENIOR
Accountancy, Business, and HIGH
Management 2 (FABM2) SCHOOL

Self-
Nature of a Bank Learning
Module
Reconciliation Statement Part I 5

Quarter 2
Fundamentals of Accountancy, Business, and Management 2
Quarter 2 – Self-Learning Module 5: Nature of a Bank Reconciliation
Statement Part I
First Edition, 2020

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 SENIOR

FABM2 HIGH
SCHOOL

Self-
Learning
Module
5

Quarter 2
Nature of a Bank
Reconciliation Statement
Part I
Introductory Message

For the facilitator:

Welcome to the FUNDAMENTALS OF ACCOUNTANCY, BUSINESS, AND

MANAGEMENT 2 for Grade 12 Self-Learning Module on BANK RECONCILIATION
STATEMENT PART I.

This Self-Learning Module was collaboratively designed, developed and

reviewed by educators from the Schools Division Office of Pasig City headed by its
Officer-in-Charge Schools Division Superintendent, Ma. Evalou Concepcion A.
Agustin, in partnership with the City Government of Pasig through its mayor,
Honorable Victor Ma. Regis N. Sotto. The writers utilized the standards set by the K
to 12 Curriculum using the Most Essential Learning Competencies (MELC) in
developing this instructional resource.

This learning material hopes to engage the learners in guided and independent
learning activities at their own pace and time. Further, this also aims to help learners
acquire the needed 21st-century skills especially the 5 Cs, namely: Communication,
Collaboration, Creativity, Critical Thinking, and Character while taking into
consideration their needs and circumstances.

In addition to the material in the main text, you will also see this box in the
body of the module:

Notes to the Teacher

This contains helpful tips or strategies that
will help you in guiding the learners.

As a facilitator you are expected to orient the learners on how to use this
module. You also need to keep track of the learners' progress while allowing them to
manage their learning. Moreover, you are expected to encourage and assist the
learners as they do the tasks included in the module.
 For the learner:

Welcome to the Fundamentals of Accountancy, Business, and Management 2

Self-Lerning Module on BANK RECONCILIATION STATEMENT PART I.

This module was designed to provide you with fun and meaningful
opportunities for guided and independent learning at your own pace and time. You
will be enabled to process the contents of the learning material while being an active
learner.

This module has the following parts and corresponding icons:

Expectations – These point to the set of knowledge and skills

that you will learn after completing the module.

Pretest - This measures your prior knowledge about the lesson

at hand.

Recap - This part of the module provides a review of concepts

and skills that you already know about a previous lesson.

Lesson - This section discusses the topic in the module.

Activities – These are sets of activities that you need to

perform.

Wrap Up - This section summarizes the concepts and

application of the lesson.

Valuing - This part integrates a desirable moral value in the

lesson.

Posttest - This measures how much you have learned from the
entire module.
 EXPECTATIONS

After going through this self-learning module, you are expected to:
1. describe the nature of the bank reconciliation statement;
2. define bank reconciliation form and bank reconciliation statement; and
3. identify the importance of a bank reconciliation statement.

PRETEST

Directions: From the statements below encircle the numbers that best describes
the Bank Reconciliation Statement.

1. Bank Reconciliation Statement certifies that payments were processed and

cash receipts have been deposited into a bank account.
2. Bank Reconciliation Statement serves as a tool in the identifying of errors in
the accounting records of the business or the bank.
3. Bank Reconciliation Statement is a process using two sets of records to ensure
accurate recording of the figures.
4. Bank Reconciliation Statement serves as the basis for the preparation of the
cash adjustments at the end of the period.
5. Bank Reconciliation Statement assists the company in monitoring of its
monthly cash flows.
6. Bank Reconciliation Statement use as a tool in preparing Bank Statements.
7. Bank Reconciliation Statement helps define discrepancies between the bank
balance and book balance, to correct errors on both balances.
 RECAP

Problem Solving. Directions: Prepare accurately the requested Bank Statement.

Use the space provided.
Izumi Reeves is an account holder of EMPIRE BANKING. Mr. Reeves made cash
transactions last July 2020. His beginning balance was P18,000.00. For July,
Mr. Reeves made the following transactions: deposited P1,800 on July 3,
P5,000.00 for July 16; and withdrew P10,000.00 on July 6, and P12,000.00 on
July 7. Mr. Reeves is a holder of passbook-peso savings account with a
maintaining balance of P5,000.00.

Mr. Reeves address is 54C Chico St., Makati City, and his peso Account No. is
8867559043.
 LESSON

A company's general ledger Cash account contains a record of the

transactions (cash receipts from customers, checks written, receipts, and others)
that involve its checking account. The bank also creates a record of the company's
checking account when it processes the company's checks, deposits, service
charges, and other items. Every end of the month the bank usually mails a bank
statement to the company. The bank statement states the activities in the bank
account of the company during the recent month as well as the balance in the
bank account.

When the company received its bank statement, it must verify the amounts
shown in the bank statement if it tallies with the amounts in the company's Cash
account that is recorded in its general ledger and vice versa. Bank reconciliation
statement is the process of confirming the company’s cash transactions on the
bank. The benefit of reconciling the bank statement is knowing the consistency of
the amount of Cash reported by the company (company's books) compared to the
amount of cash shown in the bank's records.

There are instances that companies experienced when comparing their cash
book from the bank balance, the two balances do not tally. To reconcile both
records, first, find out the causes of discrepancies, then reflect them in Bank
Reconciliation Statement to reconcile both balances.

To prepare a bank reconciliation statement, it is needed to have a bank

balance as per cash book and a bank statement of a specific day together with the
details of both books. In case balances stated on both books differ and the entries
in both books are compared and the items on the account which the discrepancies
had arisen the bank reconciliation statements are to be prepared.

Reconciliation – defined as a process using two sets of records, the company’s

record or the ledger and the bank’s records, to ensure accurate recording of the
figures. It confirms the money leaving an account equals the amount that has
been spent, and ensure the two are balanced at the end of the recording period.

What is the Nature of Bank Reconciliation Statement?

- Bank reconciliation statement is a report comparing the bank balance
with balance stated in the bank statement as per the company’s
accounting records.

- Bank reconciliation statement should be completed at regular

intervals to ensure that company's cash records are correct.
Otherwise, cash balances can be lower than expected which may
lead to bounced checks or overdraft fees.

- The reconciliation statement helps define discrepancies between the

bank balance and book balance, to correct errors on both balances.
What is Bank Reconciliation Statement?
- is the basis for the preparation of the cash adjustments at the end of
the period.
- is a description of the banking and business transaction which
reconciles the company’s bank account with its financial records. The
statement specifies the deposits, withdrawals, and other events that
affect a bank account for a specific period.
- summarizes banking and company activities, reconciling the bank
account of the company with its financial records.
- certifies that payments were processed and cash receipts have been
deposited into a bank account.
- All fees charged to a bank account shall be accounted for in the
reconciliation statement.

Is Bank Reconciliation Statement Important?

• It serves as a tool in the identifying of errors in the accounting records of the
business or the bank;
• Provides necessary control mechanism to help protect the valuable resource
through recovering irregularities;
• Gives the company an added comfort that the bank transactions were
accurately recorded in their account;
• Assists the company in monitoring its monthly cash flows.
What is Reconciliation Bank Form?
- It is assumed no recording errors are made by the bank or the depositor but
the reconciliation form should provide space in the event of such error or
errors occurs. Normally the purpose of this reconciliation form is to enlist
outstanding checks.
 ACTIVITIES

Activity no. 1 In other news………….

Directions: In the space provided, create a news script delivering the:
1) Nature of bank reconciliation.
2) Definition of bank reconciliation form and bank reconciliation statement.

Activity No. 2 CONVINCE ME

Why is it important for a bank account holder to conduct reconciliation in their
records?
 WRAP–UP

POST IT!
Directions: Illustrate/draw what you learned from this module. Write a brief
explanation of your illustration.

VALUING

The concept of reconciling is the act of making two or more ideas to become one.

Directions: Answer the question.

How does your family reconcile its savings and expenses during the
pandemic (COVID19)?
 POSTTEST

Directions: Why is Bank Reconciliation Statement important?

1.
2.
3.
4.
5.
 KEY TO CORRECTION

Ending Balance P2,800.00 7.

6.2 Date Withdrawn, July 6, 2020, P10,000.00; July 7, 2020 P12,000.00
6.1 Date Deposited, July 3, 2020 P1,800.00; July 16, 2020 P5,000.00
6. Details of Transactions:
P18,000.00
5. Beginning Balance
8867559043
4. Account Number of the Depositor
54C Chico St., Makati City
3. Address of the Depositor
Izumi Reeves
2. Name of the Depositor
EMPIRE BANKING
1. Name of the Bank
RECAP-BANK STATEMENT

(Learner’s own point of view) Bonus 5.

Assists the company in monitory its monthly cash flows. 4.
recorded in their account;
Gives the company an added comfort that the bank transactions were accurately 3.
recovering irregularities;
Provides necessary control mechanism to help protect the valuable resource through 2. 7
business or the bank; 5
It serves as a tool in the identifying of errors in the accounting records of the 1. 4
2
(Learners may write the importance in no particular order) 1
POSTTEST PRETEST

REFERENCES
BOOKS
Beticon, Josefina L., James Christopher D. Domingo, Fermin Antonio D.
Yabut. Fundamentals of Accountancy, Business, and Management 2,
Textbook. pp. 144-145. Vibal Group, Inc., 2016, Quezon City
Harina, Ricardo M.. College Accounting 1, Revised Ed.. p. 149, National Book
Store, 2007, Mandaluyong City.
Salazar, Dani Rose C.. Fundamentals of Accountancy, Business, and
Management 2, First Ed.. p 182. Rex Book Store, 2017, Manila.
Monfero, Reymond Patrick P., Carlsberg S. Andres, Dani Rose Salazar,
Christopher B. Honorario. Fundamentals of Accountancy, Business, and
Management 2. Commission on Higher Education, 2016, Quezon City.
WEB
https://www.investopedia.com/terms/r/reconciliation.asp
https://www.accountingtools.com/articles/2017/5/17/bank-reconciliation
http://ncert.nic.in/ncerts/l/keac105.pdf
https://www.accountingcoach.com/bank-reconciliation/explanation
https://www.merriam-webster.com/dictionary/reconcile