part 5: bank reconciliation dollars & sense. bank reconciliation
TRANSCRIPT
Unit 3: Financial Institutions & Banking Systems
Part 5: Bank Reconciliation
Dollars & Sense
Bank Reconciliationa statement showing how your check register
balance and a bank statement balance are brought into agreement.
Why do a reconciliation?
Mistakes Happen!
Checking Accounts - Terms
Service Charge: the fee a bank charges for using a service.
Overdrawing: writing a check for more than you have in your checking account.
Bank Statement: A monthly report sent to you from the bank that shows the condition of your checking account.
Checking Accounts - Terms
Outstanding Check: A check that has not been paid, or cashed.
Cancelled Check: A check that has been paid (cashed by person who received the check).
Deposit in-transit: A deposit made to but has not yet been posted to your account.
Steps to Complete a Bank ReconciliationStep 1: Identify any outstanding checksStep 2: Identify any deposits in transitStep 3: Analyze bank statement for
transactions not recorded in the check register. Example: Automatic Payments (PayPal)
Step 4: Look for recording and math errorsStep 5: Compare adjusted balance to bank
statement balance
Slide 7
Bank Reconciliation Example
Let’s Try a Bank Reconciliation
Look at Checkbook Reconciliation Practice #1
Your TaskLook at Checkbook Reconciliation Practice #2