ACC 311 Study Guide - Midterm Guide: Bank Reconciliation, Finance Charge, Origination Fee
First, find true deposits for current month and dit (bank) and oc (books) For bank balance, deposits per bank minus deposits in transit from previous month. Dit from month, true deposits minus deposits per books. For books balance, checks per bank minus oc from previous month. Oc from month, true deposits minus checks per book. Next, do actual bank reconciliation for that month. Jan 1: on jan 1, comp a pledged ,500,000 of a/r as collateral on a ,300,000 loan from bank 1. Bank charged an origination fee equal to 3% of pledged, and note bears interest at 12% per year: as of jan 31, comp a collected ,000 on assigned accounts, but wrote off ,000 of assigned accounts as uncollectible. A/r: comp a immediately remitted the cash collected to bank, along with interest payment for one month the note was outstanding. On may 1, comp a sold ,600,000 of a/r to bank 1 without recourse.