Bank Reconciliation

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Bank Reconciliation

• Objective 4.02D
• Students will understand and complete the bank
  reconciliation process.

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Bank Reconciliation

• Do they have the same balance?
• Yes, or reconciliation is not complete!
• Reconciliation helps to find/correct any mistakes
  in your register!

• What is a bank reconciliation?
• Document that shows two equal balances
• Your record of your checking account
• The banks record of your account

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Cancelled or Cleared Checks Examples

• Check that has processed through the bank
• Payment has been deducted from drawers account

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Outstanding Checks

• What is an outstanding check?
• Outstanding checks are checks that have not
  cleared (been deducted from) the bank statement
  balance.
• Need to know items outstanding in order to
  reconcile statement
• How to know if checks are outstanding
• Find out which checks are outstanding by
  comparing the bank statement with the checkbook
  register

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Reconciling a Checkbook

• Purpose to make sure the banks records agree
  with your records
• 1. Look for outstanding checks and deposits
• 2. Review checks, deposits, ATM activity on the
  bank statement to make sure that your records are
  correct
• 3. Make adjustments to the bank statement and
  your records to ensure that you and the bank have
  the same amount of money
• 4. Reconcile every statement upon receipt in case
  there are mistakes

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Steps in a Bank Reconciliation

1. Obtain the monthly bank statement.
2. Determine checks paid. (Tick mark items)
3. Find differences between the monthly bank
   statement and monthly check register.
4. Calculate the adjusted balance.
5. If the balances do not agree, check the steps
   again and recalculate.
6. Account balances must be equal!