Effect of capital expenditure and correction

When capital expenditure treated/recorded as revenue expenditure the following error/effect  will incur

Asset           Expense          Profit

decrease                           increase                                     decrease

Rules for bank statement

When the company receives its bank statement, the company should verify that the amounts on the bank statement are consistent or compatible with the amounts in the company's Cash account in its general ledger and vice versa.

What is Outstanding check

Outstanding check 

1.An outstanding check is a check that has been written by a company (and deducted from the appropriate general ledger cash account) but it has not yet cleared the bank account on which it is drawn.

2.Hence, outstanding checks will mean that the balance in the bank account will be greater than the balance in the general ledger account (or in an individual's check register).

What is Outstanding deposit

Outstanding deposit

1.An outstanding deposit refers to a company's receipts (cash, checks from customers, etc.) which have been recorded by the company, but the amount will appear on its bank statement at a later date. An outstanding deposit is also known as a deposit in transit.

What is Bank statement &Bank reconciliation?

 

Bank statement 
1.it  is a summary of financial transactions which have occurred over a given period on a bank account held by a person or business with a financial institution.

2.A bank statement is a record, usually sent to the account holder once per month, summarizing all transactions in an account during the time from the previous statement to the current statement.

BANK STATEMENT