bank and income statements quick check

Answer 1

Certainly! Here’s a quick checklist for reviewing bank and income statements:

Bank Statement Quick Check

1. Account Information

   • Verify account number and bank name.
   • Ensure statement period is correct.

2. Transaction Review

   • Check for any unauthorized transactions.
   • Compare transactions with receipts or personal records.

3. Deposits

   • Verify that all expected deposits are listed.
   • Check the amounts against records.

4. Withdrawals and Payments

   • Review all withdrawals for accuracy.
   • Ensure payments are correctly documented and match invoices (if applicable).

5. Fees

   • Look for any bank fees that you might not recognize.
   • Confirm the legitimacy of charges (e.g., overdraft, maintenance).

6. Balance Comparison

   • Check the ending balance against your records.
   • Note any discrepancies and investigate.

7. Interest Earned (if applicable)

   • Confirm interest payments are accurately reflected.

Income Statement Quick Check

1. Revenue

   • Verify total revenue and ensure it matches sales records and invoices.
   • Look for any unusual spikes or drops in revenue.

2. Cost of Goods Sold (COGS)

   • Confirm that COGS aligns with inventory records and purchase invoices.
   • Check for accuracy in calculations.

3. Gross Profit

   • Ensure gross profit is calculated correctly (Revenue - COGS).

4. Operating Expenses

   • Review all operating expenses for accuracy and reasonableness.
   • Categorize expenses and compare them to the budget or past periods.

5. Net Income

   • Ensure net income is calculated correctly (Gross Profit - Total Operating Expenses).
   • Look for any unusual items that might skew net income.

6. Comparative Analysis

   • Compare current period results with previous periods.
   • Identify trends or anomalies in revenue and expenses.

7. Ratios

   • Calculate key financial ratios (e.g., profit margin, operating expense ratio) to assess performance.

Final Steps

• Reconcile Differences

  • Any discrepancies found should be reconciled, and investigate their causes.

• Documentation

  • Keep a record of notes, explanations, or adjustments made during the review process.

By following this checklist, you will have a clearer understanding of the financial position reflected in both your bank and income statements. Let me know if you need more detailed guidance on any specific area!