Corporatefinanceinstitute com 1 The Corporate Finance Institute Accounting For more eBooks please visit

Example: XYZ Company is closing its book and must prepare a bank 
reconciliation for the following items: 
•
Bank statement contains an ending balance of $300,000
•
Bank statement contains a $100 service charge for operating the account
•
Bank statement contains interest income of $20
•
XYZ issued $50,000 of cheques that have not yet cleared the bank
•
XYZ deposited $20,000 but did not appear in the bank statement

---

corporatefinanceinstitute.com
25
The Corporate Finance Institute
Accounting
Accounting Principles
PART 02
02
01
03
Financial Accounting Theory

---

corporatefinanceinstitute.com
26
The Corporate Finance Institute
Accounting
Financial Accounting Theory
Now that we’ve covered some general 
bookkeeping and accounting conventions, let’s 
take a closer look at financial accounting, its 
importance, and specifically assets, liabilities, 
and equity accounts. Financial accounting 
theory focuses on the “why” of accounting – 
the reasons why transactions are reported in 
certain ways.
The majority of introductory accounting 
courses, cover the “what” and “how” of 
accounting. These include looking at hundreds 
of journal entries, gaining familiarity with all 
the common accounts that companies use, 
and learning how financial statements are put 
together and how to calculate the proper debit 
and credit amounts

---

corporatefinanceinstitute.com
27
The Corporate Finance Institute
Accounting