Answered step by step
Verified Expert Solution
Question
1 Approved Answer
How do you balance your checkbook? Your roommate, Deborah, has never before had a checking account, but she finally opened one last month. Deborah is
How do you balance your checkbook? Your roommate, Deborah, has never before had a checking account, but she finally opened one last month. Deborah is standing in the doorway of th kitchen with the check register in one hand and the recently arrived bank statement in the other. Admitting that she doesn't know what to do next, Deborah asks for your help in reconciling, or balancing, her checkbook. Being both a good friend and a student of personal finance, you've agreed to walk Deborah through the process. DEBORAH: Thanks for helping me with this bank statement thing. So, where do we start? YOU: Let's start with some preliminary questions. I'll ask and you answer, and we'll agree on some fundamentals about reconciling bank accounts. So, why is it a good idea to reconcile your bank account or balance your checkbook? DEBORAH: 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 YOU: You're absolutely correct! Now, according to the experts, how frequently should a bank reconciliation be performed, and how frequently should ongoing or between-statement deposits and withdrawals be verified with the bank? DEBORAH: That's an easy one. I remember reading that I should reconcile my bank account deposit and withdrawal transactions online every couple of days. , but I should verify my ongoing YOU: That's right! Now that you've got the fundamentals under control, let's go through the actual process of balancing the checkbook. Now, with Deborah's latest bank statement and her check register or ledger in hand, you can examine the documents. Using the documentation from the bank and from Deborah's check register, construct the bank reconciliation statement for March 26. Hint: 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
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started