Reconciling Your Bank Statement

When should a bank reconciliation be done?

AS SOON AS POSSIBLE (within 1 week)

Sixth step of reconciling check register

Compare the new ending balance on the reconciliation form to the ending balance in your register.

Second thing to check in finding a reconciling error

Using right balance?: Make sure that you started reconciling the statement with the ending balance that is on the bank statement.

Sixth thing to check in finding a reconciling error

make sure the check and deposit amounts on the register match those on the statement

Second step of reconciling check register

put a check mark beside each item on checkbook register that appears on the statement (which are the ones the bank has added or taken out of the account)

First step of reconciling check register

subtract any fees/services charges that appear on the bank statement

"cleared the bank"

the bank has paid the check and the amount of the check has been taken out of the account of the person who wrote the check.

outstanding checks

checks that have been written and subtracted from the account holder's checkbook, but which have not yet been sent to their bank for payment yet.

outstanding deposits

deposits that the account holder have put into the bank but the bank has not put into the person's account yet.

Fourth step of reconciling check register

(+) add outstanding deposits (the ones the bank has not put into your account yet) to the ending bank balance.

What do you do after the 6th step of reconciling check register?

1) If the answer you found MATCHES the balance you have in the check register, yell HURRAY and mark OK in the register!!!! 2) If the answer you found DOES NOT MATCH, sigh and find the error.

Why should a bank reconciliation be done?

1) to explain any difference between the depositor's balance per books and the balance per bank; 2) whenever the bank refuses to lend the company money, 3) when the person who is authorized to sign checks wants a reconciliation 4) . when an employee is suspected of fraud

How long does an account holder have to tell the bank that a bank error has been made on adding/taking out of their checking account?

60 days

Third thing to check in finding a reconciling error

Check the math: Check your math on the reconciliation form and then check the math in your check register

check safekeeping

Common practice whereby the bank does not return canceled checks but allows customers to request photocopies if proof of payment is required.

How does a person check the accuracy of the transactions that debit/credit (add to the account/take out of the account?

Do a statement reconciliation

Fifth step of reconciling check register

List all the outstanding checks (the ones you have written but the bank has not taken out of your account yet) and ADD them up. SUBTRACT the total from the bank balance.

Fifth thing to check in finding a reconciling error

Make sure all service charges, fees, or earned interest have been recorded on the check register

Third step of reconciling check register

On the reconciliation form, write the ENDING BALANCE that is written on the statement

First thing to check in finding a reconciling error

Simple error?: Subtract the 2 amounts to see just how far you are off. Maybe there is a check or deposit that was that exact amount. See if you added/subtracted that correctly when you were reconciling.

Fourth thing to check in finding a reconciling error

Tell yourself, "I can do this!" Then look over outstanding deposits and outstanding checks to see if something was messed up and forgot something when you reconciled...maybe something from previous

Bank Statement Reconciliation

The process by which the depositor checks to see if their checkbook balances agrees/matches the bank statement balance.

canceled check

a check with the bank's stamp on it, indicating that it has been paid by the bank and has been taken out of the account of the person who wrote the check.

bank statement

a printed record of the balance in a bank account and the amounts that have been paid into it and withdrawn from it, and perhaps mailed or put on line for/to the holder of the account.