SECTION 3.2
RECONCILE A BANK STATEMENT
HOW DO CHECKING ACCOUNT USERS
MAKE SURE THAT THEIR RECORDS ARE
CORRECT?
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IN THE PREVIOUS SECTION, YOU LEARNED HOW TO RECORD
DEBITS (WITHDRAWALS), CREDITS (DEPOSITS), AND CALCULATE
THE NEW ACCOUNT BALANCE. IN YOUR GROUPS, ANSWER
THE FOLLOWING QUESTIONS:
WHAT DOES IT MEAN TO RECONCILE A SAVINGS OR
CHECKING ACCOUNT?
WHY IS IT IMPORTANT TO RECONCILE THE CHECK REGISTER
MONTHLY?
WHAT PROBLEMS COULD ARISE IF YOU THINK YOU HAVE MORE
IN YOUR ACCOUNT THAN THE BANK KNOWS YOU HAVE?
WHAT PROBLEMS COULD ARISE IF YOU THINK YOU HAVE LESS
IN YOUR ACCOUNT THAN THE BANK KNOWS YOU HAVE?
• MANY, IF NOT MOST, CHECKING ACCOUNT CUSTOMERS
KEEP A RECORD OF ALL TRANSACTIONS CONCERNING A
CHECKING ACCOUNT IN EITHER A PAPER OR ELECTRONIC
CHECK REGISTER.
• THE BANK ALSO KEEPS A RECORD OF ALL
TRANSACTIONS.
• EVERY MONTH, THE BANK MAKES AVAILABLE, THROUGH
MAIL OR ELECTRONIC ACCESS ON THE INTERNET, A
STATEMENT LISTING ALL OF THE TRANSACTIONS AND
BALANCES FOR A CHECKING ACCOUNT.
• BANKS PROVIDE STATEMENTS FOR SAVINGS ACCOUNTS
ALSO.
• ACCOUNT NUMBER – A NUMBER THAT APPEARS ON ALL CHECKS, DEPOSIT
SLIPS, AND BANK STATEMENTS
• BANK STATEMENT – A STATEMENT THAT INCLUDES ALL TRANSACTIONS
THAT HAVE OCCURRED FOR A PERIOD OF APPROXIMATELY A MONTH
SAMPLE BANK STATEMENT
• STATEMENT PERIOD – DATES ON A BANK STATEMENT THAT INDICATE THE
RANGE OF DATES IN WHICH THE TRANSACTIONS OCCURRED
• STARTING BALANCE – THE AMOUNT OF MONEY IN A CHECKING
ACCOUNT AT THE BEGINNING OF A STATEMENT PERIOD
• ENDING BALANCE – THE AMOUNT OF MONEY IN A CHECKING ACCOUNT
AT THE END OF A STATEMENT PERIOD
• OUTSTANDING DEPOSITS – DEPOSITS THAT DO NOT APPEAR ON THE
BANK STATEMENT
• OUTSTANDING CHECKS – CHECKS THAT DO NOT APPEAR ON THE BANK
STATEMENT
• YOU SHOULD VERIFY THE BANK’S RECORDS TO MAKE SURE NO MISTAKES
HAVE BEEN MADE.
• BALANCING A CHECKBOOK– THE PROCESS OF VERIFYING THE BANK’S
RECORDS TO MAKE SURE NO ERRORS HAVE BEEN MADE
• RECONCILING A BANK STATEMENT – THE PROCESS OF VERIFYING THE
BANK’S RECORDS TO MAKE SURE NO ERRORS HAVE BEEN MADE
• MOST BANK STATEMENTS INCLUDE A CHECKING ACCOUNT SUMMARY
WHICH GUIDES THE BANKING CUSTOMER THROUGH THE BALANCING OR
RECONCILING PROCESS.
• CHECK REGISTERS CONTAIN A COLUMN TO PLACE A CHECK MARK FOR
CLEARED ITEMS TO ASSIST IN BALANCING.
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?
CHECK YOUR UNDERSTANDING
• NAME SOME REASONS WHY A CHECK MAY NOT HAVE CLEARED
DURING THE MONTHLY CYCLE AND APPEAR ON THE BANK
STATEMENT.
EXAMPLE 2
• USE ALGEBRAIC FORMULAS AND STATEMENTS TO MODEL THE CHECK
REGISTER BALANCING PROCESS.
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.
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.
CHECK YOUR UNDERSTANDING
• WRITE A FORMULA TO CALCULATE THE SUM OF THE OUTSTANDING
CHECKS.
3.2 HW
• P.127#2-8ALL; 10, 12