1. Unit 3: Financial Institutions & Banking Systems
Dollars & Sense
Unit 3: Financial Institutions & Banking Systems
Part 5: Bank Reconciliation

2. Bank Reconciliation

3. Mistakes Happen! Bank Reconciliation
a statement showing how your check register balance and a bank statement balance are brought into agreement.
Why do a reconciliation?
Mistakes Happen!

4. Checking Accounts - Terms
Service Charge: the fee a bank charges for using a service.
Overdrawing: writing a check for more than you have in your checking account.
Bank Statement: A monthly report sent to you from the bank that shows the condition of your checking account.

5. Checking Accounts - Terms
Outstanding Check: A check that has not been paid, or cashed.
Cancelled Check: A check that has been paid (cashed by person who received the check).
Deposit in-transit: A deposit made to but has not yet been posted to your account.

6. Steps to Complete a Bank Reconciliation
Step 1: Identify any outstanding checks
Step 2: Identify any deposits in transit
Step 3: Analyze bank statement for transactions not recorded in the check register. Example: Automatic Payments (PayPal)
Step 4: Look for recording and math errors
Step 5: Compare adjusted balance to bank statement balance

7. Bank Reconciliation Example

8. Let’s Try a Bank Reconciliation
Look at Checkbook Reconciliation Practice #1

9. Your Task
Look at Checkbook Reconciliation Practice #2