Your roommate, Akira, is embarrassed. She has never before had a checking account, but she finally opened one last month. She's standing in the doorway of the kitchen with her check register in one hand and her recently arrived bank statement in the other. Admitting that she doesn't know what to do next, she's asked for your help in learning how to reconcile, or balance, her checkbook. Being both a good friend and a student of personal finance, you've agreed to walk Akira through the process. Moreover, knowing the value of asking and answering good questions when learning how to do something, Akira agreed to answer your questions about the process. Akira: 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? 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 date on the bank statement . 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? Akira: That's an easy one. I remember reading that I should reconcile my bank account monthly , but I should verify my ongoing deposit and withdrawal transactions online every couple of days. 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 Akira's latest bank statement and her check register or ledger in hand, you can examine the documents. Use the grey slider along the right-hand side of each of the following boxes to see Akira's bank statement and check register (account ledger). Fourth State Bank of San Francisco, CA Statement of Account September 2011 Akira Smythe 550 Angel Street San Francisco, CA Date 9-01 9-01 9-03 Subtractions Additions Description Previous balance Deposit Check 300 Account 348596 Balance 1,546.75 1,946.75 1,446.75 400.00 500.00 9-04 Check 301 ATM withdrawal 250.00 25.00 100.00 35.15 400.00 9-05 9-05 9-11 9-15 9-18 9-21 9-22 9-24 Deposit ATM withdrawal Deposit Check 302 ATM withdrawal Deposit Check 303 1,196.75 1,171.75 1,271.75 1,236.60 1,636.60 1,486.60 1,438.95 1,578.95 1,528.95 150.00 47.65 140.00 50.00 100.00 35.15 400.00 9-05 9-11 9-15 9-18 9-21 9-22 9-24 9-26 Deposit ATM withdrawal Deposit Check 302 ATM withdrawal Deposit Check 303 ATM withdrawal 150.00 47.65 1,271.75 1,236.60 1,636.60 1,486.60 1,438.95 1,578.95 1,528.95 1,478.95 140.00 50.00 50.00 Withdrawals Date Sep-01 Sep-03 Sep-04 Sep-05 Sep-05 Sep-11 Sep-15 Akira's Account Ledger Transaction Description Deposit Deposit - Payroll $400.00 Check 300 - Rent Check 301 - Car payment ATM withdrawal 87501 Deposit - Birthday gift 100.00 ATM withdrawal 89502 Deposit - Payroll 400.00 $500.00 250.00 25.00 Balance $1,946.75 1,446.75 1,196.75 1,171.75 1,271.75 1,236.60 1,636.60 35.15 1,486.60 150.00 47.65 140.00 Sep-18 Sep-21 Sep-22 Sep-24 Sep-26 Sep-27 Sep-27 Sep-27 Sep-28 Check 302 - Groceries ATM withdrawal 93503 Deposit - Stipend Check 303 - Bookstore ATM withdrawal 94504 Check 304 - Dry cleaning ATM withdrawal 97505 Check 305 - Car insurance Deposit - Belated birthday 50.00 50.00 40.00 100.75 100.00 1,438.95 1,578.95 1,528.95 1,478.95 1,438.95 1,338.20 1,238.20 1,538.20 300.00 Sep-24 Sep-26 Sep-27 Sep-27 Sep-27 Sep-28 Check 303 - Bookstore ATM withdrawal 94504 Check 304 - Dry cleaning ATM withdrawal 97505 Check 305 - Car insurance Deposit - Belated birthday 50.00 50.00 40.00 100.75 100.00 1,528.95 1,478.95 1,438.95 1,338.20 1,238.20 1,538.20 300.00 gift Sep-29 ATM withdrawal 99506 37.50 1,500.70 Using the documentation from the bank and from Akira's check register, construct the bank reconciliation statement for September 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 September 29 Ending balance per bank statement, September 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, September 29