Balancing Your Checking Account All firms must reconcile their check book balances with the balances reported to them by their banks.

Balancing Your Checking Account All firms must reconcile their check book balances with the balances reported to them by their banks. Common timing differences between account balances:

Balancing Your Checking Account All firms must reconcile their check book balances with the balances reported to them by their banks. Common timing differences between account balances: Outstanding Checks

Balancing Your Checking Account All firms must reconcile their check book balances with the balances reported to them by their banks. Common timing differences between account balances: Outstanding Checks Interest or fees recorded at the bank but not in the check register

Balancing Your Checking Account All firms must reconcile their check book balances with the balances reported to them by their banks. Common timing differences between account balances: Outstanding Checks Interest or fees recorded at the bank but not in the check register Deposits in transit

Balancing Your Checking Account All firms must reconcile their check book balances with the balances reported to them by their banks. Common timing differences between account balances: Outstanding Checks Interest or fees recorded at the bank but not in the check register Deposits in transit Common error differences between account balances:

Balancing Your Checking Account All firms must reconcile their check book balances with the balances reported to them by their banks. Forgotten transaction entry Common timing differences between account balances: Outstanding Checks Interest or fees recorded at the bank but not in the check register Deposits in transit Common error differences between account balances:

Balancing Your Checking Account All firms must reconcile their check book balances with the balances reported to them by their banks. Forgotten transaction entry Transcribed numbers (81 instead of 18) Common timing differences between account balances: Outstanding Checks Interest or fees recorded at the bank but not in the check register Deposits in transit Common error differences between account balances:

Balancing Your Checking Account All firms must reconcile their check book balances with the balances reported to them by their banks. Forgotten transaction entry Transcribed numbers (81 instead of 18) Common timing differences between account balances: Outstanding Checks Interest or fees recorded at the bank but not in the check register Deposits in transit Common error differences between account balances: Fundamental idea: Reconcile the timing differences so you can find and correct any error differences.

Balancing Your Checking Account 1 st : Update the Banks reported balance You are effectively updating the bank report for all transactions youve made (and recorded in the checkbook) since the closing date on the report

Balancing Your Checking Account 1 st : Update the Banks reported balance Ending bank balance +Deposits in Transit -Outstanding Checks =Correct Cash Balance

Balancing Your Checking Account 2 nd : Update the checkbooks reported balance You are effectively updating the checkbook for all transactions the bank made without telling you yet (bank fees and interest).

Checkbook balance +Interest paid by bank -Fees paid to bank =Correct Cash Balance Balancing Your Checking Account 2 nd : Update the checkbooks reported balance

Balancing Your Checking Account If there are any differences between the two correct cash balances, then you have an error in either your checkbook or a bank error.