Akira: Thanks for helping me with this bank statement thing. So, where do we start? Let's start with some preliminary questions. I1ll ask and you answer, and we'll agree on some You: fundamentals about reconciling bank accounts. So, why is it a good idea to reconcile your bank account or balance your checkbook? Akira According to my personal finance book, reconciling my account will help me spot potential errors in the bank statement or my own records, and it will verify my account's actual balance as of the reconciliation date date on the bank statement according to the experts, how frequently should a bank reconciliation date You: You're absolutely correct! Now, according to the experts, how frequently should a bank reconciliation be performed, and how frequntl should ongoing or between-statement deposits and withdrawals be verified with the bank? monthly but I should verify my ongoing deposit and withdrawal transactions online every quarterly monthly That's an easy one. I remember reading that I should reconcile my bank account That's right! Now that you've got the fundamentals under control, let's go through the actual process of balancing the checkbook Fourth State Bank of San Francisco, CA statement of Account Akira Smythe November 2011 550 Angel Street San Francisco, CA Account 348596 Balance Date Description Subtractions Additions Previous balance 1,546.75 11-01 Deposit 11-01 450.00 1,996.75 check 500 1,246.75 11-03 750.00 check 501 11-04 375.00 871.75 ATM withdrawal 11-05 25.00 846.75 11-05 Deposit 112.50 959.25 ATM withdrawal 924.10 11-11 35.15 Deposit 450.00 1,374.10 11-15 check 502 225.00 11-18 1,149.10 ATM withdrawal 11-21 47.65 1,101.45 Deposit 157.50 11-22 1,258.95 check 503 11-24 75.00 1,183.95 ATM withdrawal 11-26 50.00 1,133.95 Akira's Account Ledger Transaction Description Deposit Balance Date withdrawals Deposit Payroll $450.00 $1,996.75 Nov-01 - check 500 Rent $750.00 Nov-03 1,246.75 check 501 Car payment 871.75 Nov-04 375.00 ATM withdrawal 87501 Nov-05 25.00 846.75 Deposit Birthday gift Nov-05 112.50 959.25 ATM withdrawal 89502 Nov-11 35.15 924.10 Nov-15 Deposit Payroll 450.00 1,374.10 - check 502 Groceries Nov-18 225.00 1,149.10 Nov-21 ATM withdrawal 93503 47.65 1,101.45 Nov-22 Deposit Stipend 157.50 1,258.95 check 503 Bookstore Nov-24 75.00 1,183.95 Nov-26 ATM withdrawal 94504 1,133.95 50,00 check 504 Dry cleaning Nov-27 60.00 1,073.95 ATM withdrawal 97505 Nov-27 100.75 973.20 check 505 Car insurance Nov-27 150.00 823.20 Deposit Belated birthday Nov-28 337.50 1,160.70 gift Nov-29 ATM withdrawal 99506 37.50 1,123.20 Using the documentation from the bank and from Akira's check register, construct the bank reconciliation statement for November 26. Note: Any items that you enter into the bank reconciliation statement should be entered in the order in which they appeared on the account ledger and bank statement. Akira Smythe's Bank Reconciliation for November 29 Ending balance per bank statement, November 26 Add: Deposit in transit Deduct: outstanding checks and ATM transactions check number ATM number check number ATM number Total withdrawals Adjusted bank balance Balance per books, November 29