I have a bookkeeper who is making errors and I have been asked to
explain in detail the effects of her errors on the cash reconciliation
and towards the owner's equity and so forth.  I believe I have the
positive and negatives broke apart not for sure if they are correct
though, but having a hard time coming up with the explaination of
error and its effects on the accounting.  Can you help me please, I
have put the errors below:
1.bank recorded a deposit of $200 as $2000
2. Bookkeeper mistakenly recorded a deposit $530 as $350
3. Recorded a payment of $250 from a customer as $25 on the deposit
the bank caught the error and made the correction on the amount.
4.  Check written for $255 was paid by the bank as $225
5. She wrote a check for $369 by recorded it as $396

any help you can give me would be appreciated.

Hi magoo61!!

1. bank recorded a deposit of $200 as $2000:

Recall that a bank reconciliation is a report prepared by the company
to compare the bank statement with the company?s records. This report
is prepared after receiving the bank statement. The balance per bank
is the ending balance shown on the bank statement.
Any mistake or transaction that have not been recorded in the
company?s books implies an update of the company's records. Any item
the bank has not accounted for must be added or subtracted to get the
true cash balance.
In this case you must deduct $1800.00 from Balance per bank section of
the Bank reconciliation.



2. Bookkeeper mistakenly recorded a deposit of $530 as $350:

Recall that the balance per books is the amount that the company?s
general ledger has for the balance in the Cash account.
"When reconciling the bank statement, the balance per books is the
balance of the Cash account in the general ledger that pertains to the
bank account."
From "Accounting Terms | Accounting Dictionary (B)"
http://www.accountingcoach.com/accounting-terms/accounting-dictionary/accounting-terms-B.html

In easy words, on the balance per books the collections for us made by
the bank must be added (deposits, etc.); and ,for example, NSF checks
(from customers), Service charges, etc. must be subtracted.
In this case the balance per bank is right (it includes the correct
deposit), but on the balance per books the bookkeper added only $350
instead of $530, so you must add $180.00 to the balance per books.



3. Recorded a payment of $250 from a customer as $25 on the deposit,
the bank caught the error and made the correction on the amount:

If the bookkeeper posted the $250.00 check correctly to the customer?s
account and to the bank ledger account, there is no necessary change.
If she posted the check incorrectly, the balance per bank is right but
you must add $225.00 to the balance per books because the bank
collected $250 for you and the bookkeper only add $25.



4.  Check written for $255 was paid by the bank as $225:

A bank error!! The bank statement has a discount of only $225 instead
$255, in order to balance this you must deduct $30 from the balance
per bank.



5. She wrote a check for $369 but recorded it as $396:

The bank statement is right, but the company?s records includes a
disburstment higher than the correct one, so you will need to add $27
to the balance per books.



For additional references see the following pages:
"Intermediate Financial Accounting - Cash" by W. David Albrecht:
http://www.profalbrecht.com/publish/intermediate_accounting/cash/bankrecs.html

"Sales and Collection Cycle - Part 1":
http://acg0000-00.sp01.fsu.edu/lectures/ppt/Chapter8-Part1_files/frame.htm

"Sales and Collection Cycle - Part 2":
http://acg0000-00.sp01.fsu.edu/lectures/ppt/Chapter8-Part2_files/frame.htm



Search strategy for sources:
"balance per bank" "per books"


I hope this helps you. Feel free to request for a clarification if you need it.

Regards,
livioflores-ga