Bank
Reconciliation
Chapter 4
Objectives
•
•
•
•
•
Reconcile your checking
Create bank reconciliation reports
Find errors during reconciliation
Correct errors found during reconciliation
Make corrections when QuickBooks
automatically adjusts the balance in a bank
account
• Handle bounced checks
• Reconcile credit card accounts and record a bill
for later payment
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CHAPTER 4: Bank Reconciliation
SLIDE # 2
Reconciling Bank Accounts
• Each month, QuickBooks bank account should
be reconciled and corrected for discrepancies
with the bank statement
• To reconcile a bank account:
– Open the account register in the Chart of Accounts
– Select the Banking menu, and then select Reconcile
– Check Beginning balance with the bank statement, it
should match the bank beginning balance
– Enter statement date, Ending balance, service charge
and Interest earned
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CHAPTER 4: Bank Reconciliation
SLIDE # 3
Reconciling Bank Accounts
(contd.)
• In the Reconcile window click on each line to
mark it as a cleared transaction matching with
the bank statement:
– Match the deposits and other credits
– Match the checks and other withdrawals on the bank
statement
• After clearing all transactions matching the bank
statement, the Difference field should be 0.00,
indicating that your bank account is reconciled
• Click Reconcile Now
• If you need to wait until another time to complete
the bank reconciliation, you can click Leave
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CHAPTER 4: Bank Reconciliation
SLIDE # 4
Click here if you want to see only
transactions before the statement
ending date.
The difference here
must be 0.00.
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CHAPTER 4: Bank Reconciliation
SLIDE # 5
Bank Reconciliation Reports
• QuickBooks creates both a Reconciliation Summary
report and a Reconciliation Detail report after a
successful reconcile
• Select Reconciliation Report window is displayed:
– Select Summary or Detail option
– Click Display to view the report
– Click Print to print the report
• To create bank reconciliation reports at any time:
– Select the Reports menu, select Banking, and then select
Previous Reconciliation
• If you are using QuickBooks Basic or QuickBooks Pro,
you can create Bank Reconciliation reports for the most
recently reconciled month only
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CHAPTER 4: Bank Reconciliation
SLIDE # 6
Finding Errors during Bank
Reconciliation
• The Beginning Balance Field error:
– One or more reconciled transactions were voided,
deleted, or changed since the last reconciliation
– A user removed the checkmark from one or more
reconciled transactions in the account register since
the last reconciliation
• Incorrectly Recorded transactions
– Discrepancy between a transaction in QuickBooks
and a transaction on the bank statement
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CHAPTER 4: Bank Reconciliation
SLIDE # 7
Correct Beginning Balance
• Option 1: Use the Reconciliation Discrepancy Report
– Select the Reports menu, select Banking, and then select
Reconciliation Discrepancy
– Review the report for any changes or deletions to cleared
transactions
– Enter the corrections for reconciled transactions using the report
• Option 2: Undo the Bank Reconciliation
– Select the Banking menu, and then select Reconcile
– In the Begin Reconciliation window, select the bank Account and
click Locate Discrepancies
– Click Undo Last Reconciliation
– When the undo reconciliation is complete, QuickBooks displays
a completion message, click OK
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CHAPTER 4: Bank Reconciliation
SLIDE # 8
Edit Transactions in Current
Accounting Period
• If you made the error, double-click the
transaction in the Reconcile window, make the
correction and return to Reconcile window
• If the bank made an error, enter a transaction in
the bank account register to adjust your balance
for the error
• To void a check, double-click the transaction in
the Reconcile window, select the Edit menu and
select Void Check and then return to Reconcile
window
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CHAPTER 4: Bank Reconciliation
SLIDE # 9
Edit Transactions in Closed
Accounting Periods
• Enter a reversing entry in QuickBooks
using the date of the current bank
statement and same account that you
used on the original transaction
• The two transactions cancel each other
out
• Both the original transaction and the
reversing transaction will show on the
Reconcile window, clear both transactions
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CHAPTER 4: Bank Reconciliation
SLIDE # 10
QuickBooks Automatically
Adjusts your Balance
• If the difference is not zero when you click Reconcile
Now in the Reconcile window:
– A transaction is created in the bank account for the difference
– The transaction is coded to the Opening Balance Equity account
• To Correct the problem:
– Delete the transaction that is coded to Opening Balance Equity
– Undo the Last Reconciliation
– Perform the bank reconciliation again correctly
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CHAPTER 4: Bank Reconciliation
SLIDE # 11
Handling Bounced Checks
• When Your Customer’s Check Bounces
• Receiving and Depositing the
Replacement Check
• When Your Check Bounces
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CHAPTER 4: Bank Reconciliation
SLIDE # 12
Customer’s Check Bounces
• Bounced checks are also know as NSF (nonsufficient funds)
• When customer’s check bounces, add two new
transactions to your bank account register:
– one for the amount of the check that bounced
– one for the fee charged by the bank
• To charge your customers a service fee for
processing their NSF check, enter an Invoice for
the customer
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CHAPTER 4: Bank Reconciliation
SLIDE # 13
Receiving and Depositing the
Replacement Check
• Select the Customers menu, and then select
Receive Payments
• Make sure you apply the payment against the
original invoice and the service charge invoice
• Click Save & Close
• Select the Banking menu and then select Make
Deposits
• Select the check and then click OK
• In the Make Deposits window, click Save &
Close to deposit the replacement check
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CHAPTER 4: Bank Reconciliation
SLIDE # 14
When Your Check Bounces
• Enter a transaction in the bank account register
and code it to Bank Service Charges using the
actual date that the bank charged your account
• If your balance is sufficient for the check to clear,
tell the vendor to redeposit the check
• If your balance is not sufficient, consider other
ways of paying the vendor, such as paying with
a credit card
• If your vendor charges an extra fee for bouncing
a check, enter a Bill (or use Write Checks) and
code the charge to the Bank Service Charge
account
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CHAPTER 4: Bank Reconciliation
SLIDE # 15
Reconciling Credit Cards
Accounts and Paying the Bill
• Credit card accounts should be reconciled every
month just as you do with your bank account
• After the reconciliation of credit cards,
QuickBooks asks if it should:
– Write a check for payment now
– Enter a bill for payment later
• If you don’t want to pay the whole amount due
on a credit card, edit the original Bill to match the
amount you actually intend to pay
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CHAPTER 4: Bank Reconciliation
SLIDE # 16
Summary of Key Points
•
•
•
•
•
Reconcile your checking
Create bank reconciliation reports
Find errors during reconciliation
Correct errors found during reconciliation
Make corrections when QuickBooks
automatically adjusts the balance in a bank
account
• Handle bounced checks
• Reconcile credit card accounts and record a bill
for later payment
PAGE REF # 208
CHAPTER 4: Bank Reconciliation
SLIDE # 17