Reconciliation Copyright © Texas Education Agency, 2012. All rights reserved.

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Need to Know Terms Bank Reconciliation Bank Statement Ending Balance Deposits in Transit Posted Outstanding Check Bank Statement Transaction Description Payment / Debit (-) Deposit / Credit (+) Balance Note: The terms ‘computed book balance’ and ‘balance per your books’ are terms found in the downloaded bank reconciliation template used in this lesson. These terms may be only common to this one document. Copyright © Texas Education Agency, 2012. All rights reserved.

Ending Balance - the balance reported on bank statement. Bank Reconciliation - the process of adjusting an account balance reported by a bank to reflect transactions that have occurred since the reporting date. Ending Balance - the balance reported on bank statement. Deposits in Transit - term used to describe any and all deposits that have been made by the customer, but have not yet been posted (been added to) by the bank to the individual account. Posted - to add or subtract a specific amount from an account. Outstanding Check - a valid check, although possibly already cashed, has not yet been returned for processing to the financial institution from where it originated. Bank Statement - a printed record of the balance in a bank account and the amounts that have been paid into it and withdrawn from it, issued periodically to the holder of the account. Note: The terms ‘computed book balance’ and ‘balance per your books’ are terms found in the downloaded bank reconciliation template used in this lesson. These terms may be only common to this one document. Copyright © Texas Education Agency, 2012. All rights reserved.

•Identify bank mistakes Check Register - a list (on paper or electronic) that tells you how much money you have available to spend. Keeping your check register current helps to: •Identify bank mistakes •Catch identity theft – if you see something you didn’t expect, you need to report it as quickly as possible to get full protection under US law •Avoid bounced checks •Know how much you can afford to spend, and whether you need to transfer money to your checking account (from savings, for example) to cover upcoming expenses Note: The terms ‘computed book balance’ and ‘balance per your books’ are terms found in the downloaded bank reconciliation template used in this lesson. These terms may be only common to this one document. Copyright © Texas Education Agency, 2012. All rights reserved.

Balance - your account balance calculated after the transaction Transaction Description – the recording of an exchange or transfer of goods, services, or funds. Payment / Debit (-) – Amount subtracted from your balance due to a transaction Deposit / Credit (+) – Amount added to your balance as a result of money put into your account Balance - your account balance calculated after the transaction Note: The terms ‘computed book balance’ and ‘balance per your books’ are terms found in the downloaded bank reconciliation template used in this lesson. These terms may be only common to this one document. Copyright © Texas Education Agency, 2012. All rights reserved.

Let’s see if we can balance our books! Using the list of expenses and deposits on the next slide, fill out the checking account register provided. When you are finished entering in your register continue to slide 9. Copyright © Texas Education Agency, 2012. All rights reserved.

Beginning Balance on 06/30: $150.00 Expenses: 07/01 Rent $500.00 paid with check 0001 07/07 Utilities $102.74 paid with check 0002 07/08 Groceries $64.96 paid with debit 07/12 Movies $18.65 paid with debit 07/14 Gas $31.61 paid with debit 07/19 Car Insurance $78.50 paid with check 0003 07/22 Groceries $58.30 paid with debit 07/26 Phone $80.00 paid with check 0004 07/26 Internet $62.75 paid with check 0005 07/28 Cable TV $87.00 paid with check 0006 07/30 Gas $35.22 paid with debit Deposits: 07/01 Paycheck $575.00 07/10 Babysitting $42.00 07/15 Paycheck $575.00 Copyright © Texas Education Agency, 2012. All rights reserved.

However, payments and deposits should be the same. After you have completed the checking account registers, look at the Reconciling Bank Records PDF located under Documents and Examples. Examine the bank statement and compare it to your checking account register to check for discrepancies. Notice the transaction description is slightly different than what you will have entered in the checking register. However, payments and deposits should be the same. After comparing your register to the statement, answer the two questions located under register. You are using the same two documents for this part of the lesson as you were the Guided Practice part. Copyright © Texas Education Agency, 2012. All rights reserved.