Reconcile a Bank
Statement
UNIT 1 LESSON 2
First… some definitions

Bank statement
 Shows

Statement period
 The

all transactions that have occurred during the month
dates in which the transactions occurred
Starting balance
 The
amount of money in the account at the beginning of the
statement period… NOT when you opened the account!
A Couple More…

Ending balance
 The
amount of money in the account at the end of the statement
period

Outstanding deposits
 Money
that was put into the account that do not appear on the
statement

Outstanding checks
 Checks
that have been written that do not appear on the
statement
How do we keep track?
 Customers
keep a record of all transactions in their
checking account in the check register
 Banks
keep a record of the customer’s transaction on
the bank statement
 Each
month, the bank sends a statement showing the
transactions that have affected the checking account
 It
is your job to compare your register to the bank’s
statement
 Why
is this important?
What is included on the bank
statement?

Your information (name, address, phone
number)

Your account number

A list of all transactions that have occurred
during the statement period

The starting and ending balance

Any fees charged to the account

Any interest added to the account
Example
of a Bank
Statement
Deposits and Checks
DEPOSITS


The deposit section shows
the money that was
deposited into the
account during the period
CHECKS

Checks that do not appear on
the bank statement have not
“cleared” the bank

This means the money has not
been withdrawn from your
account

You still must subtract them from
your balance!

These are called “Outstanding
Checks”
These are called
“Outstanding Deposits”
Reconciling a Bank Statement

This means comparing what you have in your
check register to what the bank says you should
have

This is VERY important
 You
could have made a mistake and have less
money than you thought—BIG TIME PROBLEMS!
 The
bank could have made a mistake and you have
more money than you thought—YAY YOU!
How to reconcile an account:
1.
Check off checks that have cleared the bank in your check
register (verify check number and amount!)
2.
Do the same with deposits
3.
Record any service charges that the bank has CHARGED YOU in
your check register
4.
Record any interest that the bank has PAID YOU in your check
register
5.
Look to see if the final amounts are equal
On the back of your bank statement, the bank provides you a
reconciliation form to make this process easier for you!
Example of a
Reconciliation
Statement
Let’s Practice

Page 124 & Reconciliation Form
Check your understanding…
Nancy has a balance of $1,078 in her
check register. The balance on her
bank account statement is $885.84.
Not reported on her bank statement
are deposits of $575, and $250 and two
checks for $195 and $437.84. Is her
check register balanced? Explain.
Practice Problem

Maria and Brian have a joint checking account. They
have a balance of $3,839.25 in the check register.

The balance on the bank statement is $3,450.10.

Deposits of $2,000, $135.67, $254.77, and $188 are
outstanding.

Checks in the amounts of $567.89, $23.83, $598.33, and
$1,000 are outstanding.

Reconcile the bank statement.
Your turn…

Reading a Bank Statement WS

Reconciling an Account WS

Bank Reconciliation Activity
Daily Grade

3-2 Reconcile a Bank Statement