3-2
RECONCILE A BANK
STATEMENT
OBJECTIVES
Reconcile a checking account with a
bank statement by hand and by using a
spreadsheet.
Slide 1
Financial Algebra
© 2011 Cengage Learning. All Rights Reserved.
Warm-up
Solve the equation for the price, P.
The formula for finding the sale price, S, on an
item costing P dollars after a D% discount is
S=P(1 – D/100).
Slide 2
Financial Algebra
© 2011 Cengage Learning. All Rights Reserved.
Key Terms
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Slide 3
account number – appears on all
bank statement – includes all transactions
statement period – dates the transactions occurred
starting balance – amount at beginning of period
ending balance – amount at end of period
outstanding deposits – deposits that did not appear
outstanding checks – checks that did not appear
balancing – a checkbook to verify bank’s records
reconciling – a bank statement to verify bank’s records
Financial Algebra
© 2011 Cengage Learning. All Rights Reserved.
Example 1
The next slide has a bank statement and check
register for Michael Biak’s checking account.
What steps are needed to reconcile Michael’s
bank statement?
Slide 4
Financial Algebra
© 2011 Cengage Learning. All Rights Reserved.
Slide 5
Financial Algebra
© 2011 Cengage Learning. All Rights Reserved.
CHECK YOUR UNDERSTANDING
Name some reasons why a check may not have
cleared during the monthly cycle and appear on the
bank statement.
Slide 6
Financial Algebra
© 2011 Cengage Learning. All Rights Reserved.
Example 2
Use algebraic formulas and statements to model the
check register balancing process.
Slide 7
Financial Algebra
© 2011 Cengage Learning. All Rights Reserved.
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.
Slide 8
Financial Algebra
© 2011 Cengage Learning. All Rights Reserved.
EXAMPLE 3
Marina 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. Not
reported on the statement are deposits of $2,000,
$135.67, $254.77, and $188.76 and four checks for
$567.89, $23.83, $598.33, and $1,000. Reconcile the
bank statement using a spreadsheet.
Slide 9
Financial Algebra
© 2011 Cengage Learning. All Rights Reserved.
CHECK YOUR UNDERSTANDING
Write a formula to calculate the sum of the
outstanding checks.
Slide 10
Financial Algebra
© 2011 Cengage Learning. All Rights Reserved.
Assignment
Pages 127 – 130, #2 – 12 even
Slide 11
Financial Algebra
© 2011 Cengage Learning. All Rights Reserved.