Bank Reconciliation Concepts

This video tutorial explains the basic process of bank reconciliation, applicable to both personal and business accounts. It covers how to compare a bank statement with a transaction register, ensuring all transactions are accounted for. The video provides a simple step-by-step guide to reconciling discrepancies, such as outstanding checks and unrecorded transactions, and highlights common reconciliation problems. The tutorial concludes with a summary and additional resources for further learning.

What is the primary purpose of a bank reconciliation?

• To find errors in the bank's records

• To determine the total number of transactions

• To compare the bank statement with the transaction register

• To calculate interest earned

In a transaction register, what does a debit represent?

• A bank fee

• A pending transaction

• Money taken out of an account

• Money added to an account

Which of the following is NOT typically included in a bank statement?

• Electronic deposits

• Loan approvals

• Checks paid

• Electronic withdrawals

What is the first step in the simple reconciliation method described?

• Check off all withdrawals

• Calculate the ending balance

• Identify outstanding checks

• Check off all deposits

When checking off deposits, what is crucial to ensure?

• The deposit is from a known source

• The dollar amount is the same

• The date matches exactly

• The deposit is over $100

What should you do if a check's date in the register does not match the bank statement?

• Ignore the check

• Contact the bank

• Ensure the dollar amounts match

• Change the date in the register

What might cause an electronic withdrawal to be missing from the register?

• It was a check payment

• It was an automatic monthly withdrawal

• It was a cash withdrawal

• It was a deposit

After accounting for all items, what is the next step in finalizing reconciliation?

• Verify all deposits

• Log all transactions

• Adjust the ending balance

• Calculate interest

What should be done with outstanding checks when adjusting the ending balance?

• Add them to the bank statement balance

• Deduct them from the bank statement balance

• Ignore them

• Add them to the register balance

Which of the following is a common reconciliation problem?

• Entering a check twice

• Forgetting to log a bank fee

• Logging deposits as withdrawals

• Ignoring electronic deposits