1. Lesson 40
Unit Price, Exchange Rates
&
Reconciliation of Bank Statements
Text Reference: Chapter 1, Section 7
Unit Cost:
Unit Cost = Price of Item
Number of Units of the Item
In deciding on a "best buy" you must consider more than the just the price. You must also consider:
- will the item spoil?
- will you like the brand?
- is the quality what you want to buy?
- do you have room to store the extra?
Example: Soft drinks are being sold in the following sizes and costs:
2 litre bottle for $2.19,
500 millilitre bottle for $0.99
355 millilitre cans @ $10.75 for 24,
12 355 ml cans for $5.50
Find the unit cost for each size and decide which one is the best buy.
Solution:

2. Exchange Rates:
$ When you travel to a foreign country, it is often necessary to exchange Canadian dollars for the
currency of the country you are visiting.
$ Banks and other financial institutions handle these transactions. They have a selling rate (for selling
currency to a customer) and a buying rate (for buying foreign currency from a customer). The
selling rate is always higher than the buying rate.
Example: You are planning a trip to the U.K. You wish to buy £ 800 for the trip. How much would
this cost if the selling rate for U.K. pounds is $2.2902?
Solution: This exchange rate means that $2.2902 Cdn will buy £ 1 U.K.
Example: You have $4000.00 Canadian that you will spend to buy U.S. dollars. How many American
dollars can you buy? The exchange rate is 1.4168.
Solution:
Example: John takes $500 U.S to the bank to change back to Canadian dollars. How much will he
receive? The buying rate is 1.3633.
Solution:

3. Reconciliation of Bank Statements
When you have a bank account it is very important to keep track of your transactions and reconcile this
with your bank statement.
o Correct any errors in the cheque register by comparing it to the bank statement
o Check off each item in the bank statement with the corresponding entry in the cheque
register
o Fill out the reconciliation form to be sure that the final balance on the bank statement is
the same as the final balance in the cheque register
Example:
Reconcile the following monthly account statement with its cheque register. There are three errors and/or
omissions in the cheque register. Before filling out the statement of reconciliation, make the necessary changes
in the cheque register. Debits are withdrawals. Credits are deposits.
BANK STATEMENT:
CHEQUE REGISTER:
Assignment: Exercise 40: Q 1 to 17