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Chapter 16. Making Purchases and Recordi... > The Monthly Ritual of Bank Account R...

The Monthly Ritual of Bank Account Reconciliation

Reconciling your bank account has never been so much fun. Fun? QuickBooks makes it seem like fun because it is quick and easy. After you get your bank statement and are ready to begin the reconciliation process, follow these steps:

Choose Banking, Reconcile. The Begin Reconciliation window appears (see Figure 16.17).

Figure 16.17. Reconciliation is a quick process in QuickBooks.

In the Account area, choose the account for which you received a bank statement.

Verify that the Beginning Balance agrees with the beginning balance shown on your bank statement. If you find a discrepancy, you must make a change in your register so that the amounts agree. The only time you should see a discrepancy is the first time that you reconcile this account. Transactions that were outstanding with the bank might not have been entered in your register. Make sure that all transactions have been entered and that the opening balances agree.

Enter the Ending Balance from your bank statement.

In the Service Charge area, enter the total of any service charge applied by the bank and the date that the charge was applied. This information appears on your bank statement.

In the Interest Earned area, enter any interest income that your bank account earned and the date that it was received. This information appears on your bank statement.

Click Continue to open the next reconciliation window.

The amounts that you see in the Checks, Payments, and Service Charges area (see Figure 16.18) represent the amounts from your register. Check off all the items that appear on your bank statement. Click an item to check it off.

Figure 16.18. Follow along with your bank statement, checking off all transactions that appear on your bank statement and verifying that the amounts you recorded in QuickBooks agree with the bank.

The amounts you see in the Deposits and Other Credits area represent the amounts from your register. Check off all items that appear on your bank statement. Click an item to check it off.

I’m tired and I want to go home! What happens if you have to stop working on the reconciliation before you’ve finished? See “Using the Reconcile Window” in the “Troubleshooting” section at the end of this chapter.

Tip from

When reconciling, you might find discrepancies between your bank statement and the amounts you recorded in QuickBooks. When this happens, first verify who is right. Banks can make mistakes—don’t take their word for it that they are correct. However, if you find that the bank is right and your transaction was entered incorrectly, open the register (leave the reconciliation window open as well), find the transaction in question, double-click the transaction or click the Go To button to get to the original entry form, and make a correction. The correction flows through to your register and, ultimately, to your reconciliation. If you find that you are missing an entry, open the appropriate window and enter the transaction in QuickBooks, making sure that the transaction is dated properly. The transaction then appears in your reconciliation when you return to it.

At the bottom of the screen you see a running balance of all the deposits and checks that you have checked off. You also see an Ending Balance (the amount from the bank statement), a Cleared Balance (the amount of items that you checked off), and a Difference amount. When all items from the bank statement have been checked off, the Difference amount is zero. If it is not zero, go back through every transaction on the bank statement, comparing it carefully to the items that you checked off. Correct any discrepancies.

After the reconciliation is finished (and the Difference amount at the bottom of the window is zero), click the Reconcile Now button to save your work and close the reconciliation window. If you need to close the reconciliation window before you have finished, click the Leave button. Your work is saved, and when you return you can start right where you left off.

When you have finished, you are given the option to print a reconciliation report (see Figure 16.19). The Detail reconciliation report gives you a detailed list of all the transactions that cleared your account during this time period as well as all outstanding transactions (amounts that have not yet cleared the bank). The Summary reconciliation report gives you the totals of all the amounts deposited to and deducted from your account during the specified time period. Printing either report is optional.

Figure 16.19. Choose to print or display a Detail report which shows all transactions, and a Summary report which gives only totals.



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