1. SECTION Copyright © Glencoe/McGraw-Hill MBA, Section 4-5, Slide 1 of 18 4-5 Reconciling the Bank Statement pp. 178-181 4-5 SECTION

2. Copyright © Glencoe/McGraw-Hill MBA, Section 4-5, Slide 2 of 18 4-5 reconcile (p. 178) To compare your check register with the bank statement of your checking account to make sure they agree. Key Words to Know

3. SECTION Copyright © Glencoe/McGraw-Hill MBA, Section 4-5, Slide 3 of 18 4-5 Adjusted = Statement – Outstanding Checks/ + Outstanding Balance Balance Payments or Debits Deposits Formula

4. SECTION Copyright © Glencoe/McGraw-Hill MBA, Section 4-5, Slide 4 of 18 4-5 Your statement balance is $598.67. You have an outstanding check for $125.44 and an outstanding debit of $235.42 that didn’t post yet. You also have an outstanding deposit of $231.98. What is your adjusted balance? Example 1

5. SECTION Copyright © Glencoe/McGraw-Hill MBA, Section 4-5, Slide 5 of 18 4-5 Step: Calculate the adjusted balance. Statement - Outstanding Checks/ + Outstanding Balance Payments or Debits Deposits $598.67 – ($125.44 + $235.42) + $231.98 $598.67 – $360.86 + $231.98 = $469.79 Example 1 Answer

6. SECTION Copyright © Glencoe/McGraw-Hill MBA, Section 4-5, Slide 6 of 18 4-5 Chris Miller’s check register balance is $2,261.50. He compares his statement and check register. For each check and deposit listed on his statement, he places a check mark next to the information in his register. He notes that the bank paid him $0.86 in interest. Example 2

7. SECTION Copyright © Glencoe/McGraw-Hill MBA, Section 4-5, Slide 7 of 18 4-5 Miller finds these outstanding checks and deposits. Check #525$341.50 Check #527$266.25 Deposit$709.75 How does Miller reconcile his statement? Example 2 (cont.)

8. SECTION Copyright © Glencoe/McGraw-Hill MBA, Section 4-5, Slide 8 of 18 4-5 Step: Reconcile the balance. Miller uses the reconciliation form on the back of his statement to reconcile his account. Example 2 Answer

9. SECTION Copyright © Glencoe/McGraw-Hill MBA, Section 4-5, Slide 9 of 18 4-5 Figure 4.11

10. SECTION Copyright © Glencoe/McGraw-Hill MBA, Section 4-5, Slide 10 of 18 4-5 Find the adjusted balance. Statement Balance: $1,708.43 Outstanding Checks: $185.29 Outstanding Deposits: $263.04 Practice 1

11. SECTION Copyright © Glencoe/McGraw-Hill MBA, Section 4-5, Slide 11 of 18 4-5 $1,786.18 Practice 1 Answer

12. SECTION Copyright © Glencoe/McGraw-Hill MBA, Section 4-5, Slide 12 of 18 4-5 Fill in the missing amount. Then determine whether the register and statement balances agree. Check Register Balance: $717.16 Interest: $1.20 Service Charge/Fees: $0 New Balance: Practice 2

13. SECTION Copyright © Glencoe/McGraw-Hill MBA, Section 4-5, Slide 13 of 18 4-5 Statement Balance: $854.07 Outstanding Checks: $197.46 Outstanding Deposits: $61.75 Adjusted Balance: Do the register and statement balances agree? Practice 2 (cont.)

14. SECTION Copyright © Glencoe/McGraw-Hill MBA, Section 4-5, Slide 14 of 18 4-5 Check Register Balance: $717.16 Interest: $1.20 Service Charge/Fees: $0 New Balance: $718.36 Practice 2 Answer

15. SECTION Copyright © Glencoe/McGraw-Hill MBA, Section 4-5, Slide 15 of 18 4-5 Statement Balance $854.07 Outstanding Checks $197.46 Outstanding Deposits $61.75 Adjusted Balance: $718.36 Do the register and statement balances agree? Yes Practice 2 Answer (cont.)

16. SECTION Copyright © Glencoe/McGraw-Hill MBA, Section 4-5, Slide 16 of 18 4-5 Reconciling the Bank Statement 4-5 END OF SECTION 179-181: 3-8