Bank Account Reconciliation

Reconciling• The process of matching your

checkbook register with the bank statement is known as reconciliation.

• The back of your statement is usually printed with a form (balance sheet) to aid you in reconciling.

What is a bank statement?

A bank statement is a monthly report or bill from a bank.

Example

Bank Statements• Monthly Statements List:

–Checks received and processed by bank–Withdrawals–Deposits–Service charges/Fees– Interest–Online Payments

Know…• The balance your checkbook shows will not always match the ending balance on the bank statement.

What you need..• Bank statement• Balance sheet• Checkbook register

Examples

Remember..Add (+)Deposits Interest earned

Subtract (-)Service fees or other chargesInterest paid

Step OneMake a checkmark next to every transaction in your check register that shows up on your bank statement. Be certain to make sure that the transaction amount for each check or transaction in your register is equal to what the bank has on record.

Step TwoRecord any fees or interest earned listed on your bank statement in your register. Be sure to checkmark these once you are sure you have written down the correct amount.

Step ThreeOn a balancing sheet, write down all checks, debit card transactions or payments from your register that have not posted on the bank statement. Total this list.

Step FourOn the balancing sheet, write down all the deposits from the bank statement that are not recorded in your register. Total this list.

Step FiveEnter you statement ending balance on the appropriate line on the balancing sheet.

Step SixEnter the total outstanding

deposits on the appropriate line on the balancing sheet.

Step SevenEnter the total outstanding checks, debit card transactions, and payments on the appropriate line on the balancing sheet.

Step EightThe new balance should equal

the ending balance in your checkbook register.