Chapter 3, Section 4Check Register Reconciliation

What’s a bank statement? Your bank keeps track of your transactions on a bank

statement and then sends it to you each month (via mail or online).

Items on the statement include: Checks written ATM/debit card use Deposits made Interest earned Service charges

What if a check that I’ve written isn’t listed on my statement? If there are checks listed in your register that aren’t listed on

the bank statement they are called “outstanding checks.” This means that they have not yet been processed and paid

by the bank—thus not subtracted from your account yet.

So how do I know if my register balance is correct? If you have outstanding checks, interest earned, or service

fees your register balance will not match the statement balance.

To figure out if your register is correct you must reconcile your checking account.

To reconcile means to bring both balances of the register and bank statement into agreement.

So how do I reconcile? Step 1: Compare the register to the bank statement. Place a

checkmark beside the checks that are in your register and listed on the statement. Any checks that are not check-marked are outstanding.

Step 2: Look at the statement. If there are any fees or interest earned on the bank statement you will need to put it on your register. Add it if it’s interest earned, subtract it if it’s a fee. If there are any deductions (debit card/ATM, checks, payments) you forgot to write down, you must subtract those from your register too!

Step 3: Complete the bank reconciliation form.

How do I complete a reconciliation form? Step 1: Add up all of your outstanding checks (the ones without a

check-mark). Step 2: Write the ending statement balance (found on the bank

statement) on line 1. Step 3:See if there are any outstanding deposits (deposits that are

on the statement that you may have forgot to write down). If there are add them and place the total on line 2.

Step 4: Total the bank statement balance and the outstanding deposits.

Step 5: Subtract the outstanding checks total. Step 6: The number you have after this should match your check

register balance.

Practice Check your understanding A, C, & E. P. 107, 5-10