The example
The steps below use a sample distributor, Lone Star Industrial Supply. Your customers, items and numbers will differ; the page and the fields won’t.
February's statement for bank 1 came in. It ends at $196,384.75, and besides the checks and deposits it shows two items only the bank knew about:
| Item | Amount | G/L account |
|---|---|---|
| Monthly service charge | $26.05 out | 6950 Bank Service Charges |
| Interest paid | $9.61 in | 4900 Interest Income |
Reconcile February in Bank Acc. Reconciliation and post it.
Step by step in Bank Acc. Reconciliation
- 1.
Search for Bank Account Reconciliations with the magnifying glass at the top, and open it.
- 2.
Choose Suggest Lines... The statement lines appear on the left, the open ledger entries on the right.
- 3.
Choose Match Automatically, then close the message.
It applies each check and deposit on the statement to its ledger entry. Check 20338 is not on the statement, so it stays open for March.
- 4.
Two statement lines matched nothing. Choose Transfer to General Journal...
- 5.
For the Monthly service charge, type 6950 in Bal. Account No.
- 6.
For Interest paid, type 4900. Then choose OK.
- 7.
Type the statement's ending balance, $196,384.75, in Statement Ending Balance. Total Difference goes to zero.
- 8.
Choose Post.
- 9.
Choose Yes.
Mistakes that cost money
These are the checks Simetta’s scored test makes on this task, and what each mistake costs a distributor when it happens for real.
Bank reconciliation not approved
Until the worksheet ties and is approved, nobody has proved the cash on the balance sheet is really in the bank.
Cleared check left outstanding
The outstanding list overstates what is still to come out of the bank, so the reconciliation will not tie and cash looks tighter than it is.
Check cleared wrong
Clearing a check the bank hasn't paid, or leaving one it has, makes the book balance disagree with the bank and hides the real outstanding items.
Cleared deposit left outstanding
The deposit looks like it is still in transit, so the reconciliation shows money on the way that the bank already has.
Bank charge or credit not booked
The books keep a balance the bank does not have. Fees, interest and returned checks only reach the ledger through the worksheet.
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