3.4 CHECK REGISTER RECONCILIATION MRS. RUIZ-EMMONS BUSINESS MATH FALL 2017

GOALS RECONCILE A BANK STATEMENT RECONCILE AND CORRECT A CHECK REGISTER

RECONCILE THE BANK STATEMENT IT IS WHAT BANKS USE TO KEEP TRACK OF CHECKING ACCOUNT TRANSACTIONS AND GENERATE A MONTHLY REPORT. A SERVICE CHARGE IS A DEDUCTION MADE BY THE BANK FOR HANDLING THE CHECKING ACCOUNT.

TERMS Interested earned is money paid to customers for the use of their money. OUSTANDING CHECKS- THIS MEANS THAT THE CHECKS HAVE NOT YET BEEN RECEIVED OR PAID BY THE BANK. A CANCELLED CHECK IS A CHECK THAT THE BANK HAS PAID AND THEN MARKED SO IT CAN’T BE USED AGAIN.

RECONCILING A BANK STATEMENT Step 1: Obtain the current balance from your bank statement. Step 2: Add any deposits that you have recorded in your check register but that are not on this statement. Step 3: Subtract any outstanding checks (checks you have written but that have not yet cleared the banking system). Step 4: Compare the result with the current balance in your check register.

Note: The balance in your check register should be adjusted to include: (a) deductions for service fees or other charges; (b) additions for direct deposits and interest earned.

CHECK YOUR UNDERSTANDING pg.101 A. MARIA’S GREELEY’S BANK STATEMENT SHOWED A CLOSING BALANCE OF $1,383.53, NO OUTSTANDING DEPOSITS , AND TWO OUTSTANDING CHECKS FOR $129.45 AND $87.39. RECONCILE HER BANK STATEMENT.

SOLUTION $1383.53 CLOSING BALANCE -$129.45 OUTSTANDING CHECK ---------------------------------------------------------------------------------- = $1,166.69

B. XAVIER ALLASANDRO HAD A CLOSING BALANCE OF $793 B. XAVIER ALLASANDRO HAD A CLOSING BALANCE OF $793.57 IN HIS BANK STATEMENT. THE OUTSTANDING ITEMS WERE: A DEPOSIT OF $312.09. CHECK 278 FOR $174.85 AND CHECK 280 FOR $32.78 RECONCILE HIS BANK STATEMENT.

$793.57 CLOSING BALANCE +312.09 DEPOSIT -$174.85 CHECK #278 -$32.78 CHECK #280 ---------------------------------------------------------------------------------- = $898.03