Alright, let’s create a practice problem for Excel accounting based on the provided scenario. This problem will involve recording transactions related to undeposited funds and checking account.
Practice Problem: Undeposited Funds and Checking Account
Imagine you are responsible for recording transactions in an Excel worksheet for a business that uses undeposited funds as a clearing account before transferring money to the checking account. The undeposited funds are used to facilitate the reconciliation process with the bank statement.
You have two transactions to record for the month of January 2021. The company received cash payments and needs to transfer them to the checking account in two separate deposits.
Here are the details for the transactions:
Transaction 1:
- Date: January 1, 2021
- Amount received in cash: $7,571
- Record this transaction in the Excel worksheet, considering the use of undeposited funds.
Transaction 2:
- Date: January 15, 2021
- Amount received in cash: $20,500
- Record this transaction in a way that aligns with the undeposited funds process.
Instructions:
- Open the provided Excel worksheet with two tabs – Example and Practice.
- On the Practice tab, record the two transactions following the principles discussed in the blog.
- Use appropriate formulas and functions to update the balances in the Checking Account and Undeposited Funds columns.
- Ensure that your Excel worksheet matches the Example tab, which serves as an answer key.
Tips:
- Utilize the undeposited funds as a temporary holding account before transferring to the checking account.
- Be mindful of the debits and credits for each transaction.
- Keep the formatting and alignment consistent with the example provided.
Feel free to explore additional scenarios or variations in the transactions to enhance your understanding of undeposited funds and checking account reconciliation in Excel.