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5.2 Bank Reconciliation

5.2 Bank Reconciliation. Bank Statement. A report of deposits, withdrawals, and bank balances sent to a depositor by a bank. Find the following: Deposits – Beenish Checks cashed - Morgan Final balance - Logan Number of checks written - Rachel Service charges - Carly Interest – Megan

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5.2 Bank Reconciliation

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  1. 5.2 Bank Reconciliation

  2. Bank Statement • A report of deposits, withdrawals, and bank balances sent to a depositor by a bank. • Find the following: • Deposits – Beenish • Checks cashed - Morgan • Final balance - Logan • Number of checks written - Rachel • Service charges - Carly • Interest – Megan • Account number – Tessa • Number of deposits - Tim See picture on pg. 124

  3. Canceled Checks Canceled • The bank stamps checks that are deposited/cashed to indicate that the checks are canceled and are not to be transferred further.Bank knows now • They may be returned to a depositor (you) or may be kept on record by the bank.

  4. Outstanding Checks & Deposits • Out. Check = checks issued by a depositor (you) but not yet cashed by the recipient; they are not reported on a bank statement(you know…bank doesn’t) • Out. Dep. = deposits made at a bank by you but not yet shown on the bank statement

  5. Brittany vs. K-Fed. • Reconcile – • To re-establish friendship between • To settle • To bring oneself to acceptance • To make consistent or compatible “Britney Spears divorcing Kevin Federline Cites irreconcilable differences; she seeks custody of couple's two sons”

  6. Why might I not agree w/the bank? • A service charge may not have been recorded in the depositor's (your) business records • Bank took $3.00 out of your account because you used the ATM over 4 times that month • Outstanding deposits may be recorded in the depositor’s records but not on a bank statement • You deposited $ into your acct. on Friday, and it won’t post until Monday…your statement arrives in your mailbox Monday…(end of the month)

  7. More reasons… • Outstanding checks may be recorded in the depositor’s records but not on a bank statement • The checks you wrote to people have not been cashed by the time your statement is produced. • A depositor may have made math or recording errors. (Transpose) ($34.56 vs. $34.65) • Joint account confusion = lack of communication • Husband writes check for yearbook but does not record it in the register

  8. Reconciled and it feels so good! • Name that song! • When our balance in our checkbook register agrees with the bank statement balance, we have reconciled! • Do monthly when your statement arrives by mail or check online banking

  9. Service Charges • See pgs. 126/127 • Recorded as a Miscellaneous Expense • Memo is the source document • WT & OYO in Aplia

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