Bank Reconciliations Using Excel - First & Second Months of Operations

1. Introduction: Bank reconciliations using Excel first, second months of operations will be a project-based course where we will put together bank reconciliations using Excel. Although you might be able to use Google Sheets as well for the first, second months of operations, explaining the problems that are typically unique to the first month of operations, the second month of bank reconciliation being similar to what we would expect to see after we have completed that first month bank reconciliation. Down below, we have some downloadable files which are Excel sheets, which you may be able to open, and Google sheets as well. Each sheet will typically have at least two tabs. One will have the completed work up through the current presentation we're working on. The second tab will have a preformatted worksheets that will be preformatted up to the point of the prior video so that you can populate the new information along with the instructional videos in a step-by-step process, the completed Excel worksheets will then be the final project. 2. Bank Reconciliation Month One Part 1: Excel accounting practice, problem, bank reconciliation, month one, part one, get ready because we're about to Excel. Here we are in our Excel worksheet and prior presentations we put together the worksheet from a blank sheet. Now continuing to enter transactions intuitive if you have access to it, There's two tabs on down below an example tab in a practice tab, the practice tabs starting out where we left off last time, the example tab in essence being an answer key, let's take a look at it now. We're gonna be doing a bank reconciliation. So the focus, of course, will be in on the checking account. We're gonna have our mock bank statement looking like this that we will be using to reconcile with. We will be reconciling both January and February, focusing in on January this time, even though we have entered two months of data thus far into the accounting system, the bank reconciliation, we're going to put all the way on the right hand side, way over here. We're gonna try to do the process of the bank reconciliation. Similar to what you might see an accounting software taking in essence our book information and comparing it to the bank statement. And then we'll also kind of mirror what you're more likely to see in a textbook type of problem. So we get a more well-rounded picture of what's going on here. Notice that if you're doing accounting software or using accounting software, people oftentimes because the bank reconciliation process is set up to work quite well, but in a systematic way they kinda confused. We often confuse the process of reconciling with what a bank reconciliation is. The bank reconciliation in essence being that last report that will be creating reconciling our balance with the bank balance as of a certain point in time. So let's go back on over to the practice tab. We're gonna do the reconciliation as of the end of January because this is our bank statements. So this is the information on the bank statement. We got the beginning balance, we've got the additions, we've got the subtractions, we've got the ending balance, then we've got our deposits and the checks and other decreases in the detail on the bank statement. Let's go back to the back to our worksheet. Then. We're gonna go all the way to the right so that we can then start to construct where we're gonna put the bank statement. So let's go all the way to the right here and give us a little bit of space so that we can work this thing out. And we'll put it right before the balance sheets. So I'm all the way over here in gx, I went to take this skinny and I'm going to go from this skinny all the way to the right. Let's take it all the way out here to HL and then let go. And I'm going to insert some columns, right-click and insert some columns to give us some states. I'm going to try to unformatted. Now I get this little paintbrush up top. I'm going to format clicking the paintbrush, clearing the formatting so that I can then format the way I want. If you don't have that little paintbrush, you can click on a cell that's a blank format in and basically use your paintbrush to format the whole thing. And I'm gonna right-click format the thing. Let's format the cells the way we want it to be formatted currency. Or at least I, this is what I'm gonna choose. You don't have to do the same thing, but this is what I'm gonna say. I'm gonna say no decimals here. And there we have it. There's our standard formatting I've been using. I'm gonna get rid of the bold it to everything is bolded. All my work is in bolded, in boldened. Then let's take this skinny over here and put that skinny right there. So there we have our worksheet to work with. Now the first thing we need is the information on our book side of things so we can compare the books to the bank statement. So normally you would go to we could go to the general ledger to do this. If you were doing accounting software, the software would basically pull that data in from an essence to general ledger as you put the data into the system. But if I go to this worksheet, I go to my G L, I'm going to have a problem. Let's take a look at it just so I can show you the problem that we have by go back on over here. We're going to pick up the checking account we closed out. You'll recall the beginning balance and lumped it into this number here and then we only have the detailed for February. So what I'm gonna do is I'm going to jump back to, back to our prior worksheet over here. And this is the last worksheet we had for month one where we have all the checking account stuff that we need. That's the one we want. So here's our detail. Here. I'm just going to copy this entire GL account. I'm just going to copy the whole thing. Copying that. And that's gonna be our start like our basis, the detail that we're gonna compare item by item with what is on the bank statement. That's what a bank reconciliation in essence does. So let's go back to our other worksheet now I'm gonna go back on over here. I'm gonna go back to the right so I can paste it. So I'm going to paste it kinda especially here because I can't paste it just normal because it's got formulas in it. The pasting procedure will then be first pasting it 123, right-click. I'm going to paste it 123. And then I want the colors and everything in there too, the formatting. So I'm going to right-click and paste it again with just the formatting. And I'm gonna paste the formatting. That way. I get that, I get the numbers and the formatting, the running balance over here is now hard-coded. As you can see, there's no formula. I'm gonna re-import the running balance on the right-hand side, which is gonna be the 25 thousand plus 265 thousand. And I'll just copy that back down. So I've just recreated the general ledger up through the end of the first month, the end of January at ends off at the 88. 811, that 88811, of course, is the beginning balance. If we go back to our GLAM, this worksheet, because we adjusted that to be our beginning balances. Just double-check that the ADA eight at 811. So there we have that. Now let's go all the way back to the right, all the way back to the right. And I'm gonna construct our worksheet, as you might see it in accounting software when you go through the bank reconciliation process. So I'm gonna make another skinny column over here. What will typically happen? I'm gonna make this column a little bit wider. We will have a beginning balance, beginning. And I'm going to call it a cleared balance, meaning the balance they cleared the bank statement and that will typically tie out to the prior bank statement balance. So you would think that that balance should be the 30 thousand here, and it typically will do, but sometimes you have a problem in the first bank reconciliation. And so we'll go over this beginning balance problem. You'll see this in accounting software. You'll see it in whatever system you're going to use and possibly will get a better concept of what that is. Doing this in a worksheet. So I'm going to put this one cell more out to the right. I'm gonna say instead of that 30 thousand, I'm gonna pick up this 25 thousand because that's the beginning balance I had in my worksheet at this point in time. So I'm gonna recognize right now that I have a problem here. I've got the 25 thousand in my worksheet versus the 30 thousand that is on the bank statement. So I have a difference of course, of 5 thousand. So we'll see how that plays out. Then. Typically what you'll have is your hub to groupings that will, that will be kind of checking off the activity that has cleared both the bank statement and your books. You're going to have the deposits and then you're going to have the checks and decreases. So I'm gonna say these are gonna be the cleared activity, cleared deposits that we're gonna have an old we're gonna do is match out then what is in our checking account, we'll just check it off to what is in the bank statement. So the idea being if we had the same starting point, which we don't this time, and we'll get into that in a second. Why that is the case. It'll work. We'll talk about that later. But if we did have the same starting point and we checked off all the activity in both, in both sides, then we have something that reconciles them, but we'll get to the same Indian balance. Whatever is not checked off then is gonna be the differences between our books and the banks books. The difference that we expect to see an art books versus the bank books is that we have some transactions that we have recorded that the bank has not yet due to timing differences, those being outstanding deposits and checks. This process we would do hears the process of reconcile lean to determine those items that are gonna be outstanding, checks and deposits. And if there's something on the bank statement that's not on our books, then that's probably something that we're going to have to add to our books, things like possibly the withdrawals at the bottom and the bank service charges, as well as any other transaction that we think is correct, meaning the bank most likely would be right in. We just have an internet on our side because we didn't know about it, or possibly we made an error or the bank could be wrong, in which case we would call the bank and try to talk to the bank and say, Hey, you've got something wrong here. But oftentimes, we're doing this to get our books to be more accurate. Oftentimes it's not the bank that is inaccurate. So we're going to then go back on over and say, let's do this. So we're gonna say the first one, I'm going to check off, Let's do the deposits. I'm gonna say the 65 thousand, I'm gonna make that, that highlighted here. And I'm gonna say that I see that right there, it as well on 11. So how could I format these? Let's format this. I'm gonna paint brush that over here. Paint brush it right there for the date format. And I'm going to just pull that over on 11 and say we've got then the 65 thousand, I'm gonna copy this formatting down. Copy the formatting Donald delete the actual dates in it so that we get a couple more of these. And so we got that one. I'm gonna make this one green then let's green a fire that one, we found it. Then we've got this next one. Notice you're usually going from the bank statement to the book. So now the next one is to 50 thousand here. Because I expect to see some stuff on my books that's not on the bank statement In everything on the bank statement, I expect to be on the books. So I would usually want to go from the bank statement to the books. We've got the 50 thousand here and there's the 50 thousand there. So this is gonna be on 11, and this is gonna be the 50 thousand. Also note that we would expect the dates on our books to be before the dates on the bank statement because the dates on the bank statement, they didn't know about it until it cleared the bank. The deposits should be fairly close in time range because the deposits shouldn't take that long to clear. So you have the dollar amount of the deposit to help you out, as well as the The, the, the date can help you out as well to some degree if you don't have your deposits. However, in the same ordering as we talked about with the use of the and deposited funds as is on the bank statement. You could see how that would become a lot more complex. So this bank reconciliation process should be an easy thing to do if it's not, if you find yourself trying to tie together certain things on your books to match the bank. Then you've got to go back and see your accounting process would be the best thing to do generally, possibly looking at your credit card company to see how they're grouping things to make the deposits, possibly then thinking about how you're making deposits of safe cash transactions, for example, in your bookkeeping side of things, do it in a way that can match the bank. Let's go back on over. We're gonna say then we want these 7570. I'm not dealing with the pennies here, so there could be off by some pennies. But we're gonna say it's right there. So there is that one. This is going to be I'll just pick up the date here and then the amount which is the 7570, then we've got the twenty thousand five hundred and twenty thousand five hundred. That is gonna be right here. So that looks good. We will pick that up at the 20,005 on 121. This will equal then the 20,500 there. There we have that. And so that's all we have thus far. I'm gonna leave a couple of spaces in case we need to make any changes to it. And I'm just going to call this total cleared deposits. Deposits. I'll put this in the outer column. Let's indent this one. Let's put this in the outer column equals the sum. And I'll pick up these blank cells here just in case I have to add anything there, we have it. Now you'll note that over here I have another deposit that didn't clear the bank statement yet. It's not on the bank statement not happened close to the end of the month, you would think it would have cleared by the 31st. But we can check if it has cleared by looking at the February bank statement to see if it has cleared. And if it has, then we're saying, okay, it's just clear transaction as of this point. So we could check that there would be a use of the bank statement. But what we really want to do also is determined what exactly the change is in terms of timing differences. So that we have a reconciliation of the bank's books and our books. And by doing that, we've double-checked all of our checking account numbers. And by double-checking all of our checking account numbers, we've also to some degree, double-check the other side of the transactions for a double-entry accounting system, given that cash is the lifeblood of the company flowing through all of their cycles. Revenue cycle, purchases cycle, employee cycle, payroll cycle. That means that we have a much better check on everything else that's going on as well. So let's go to let's go to the second half there, which is gonna be the checks were gonna say this, these are gonna be the cleared. Cleared checks. Decreases, decreases, we'll call it and colon. Now I'm going to do the same thing on the other side. We're just going to go through all these. We've got the 12 thousand up top 12 thousand. And if I go back on over here, let's do it this way. 12 thousand, There's the 12 thousand, So I've got that one. And let's pull that one in. Now notice on the CEC side of things, I'm going to highlight paintbrush a few more cells down here. You might have the check number if you're actually issuing checks. And if you don't have to check number because it's an electronic transaction, then your date will be more relevant. In other words, if you have checks, the date is going to be more irrelevant given the fact that it takes longer for the cheques to clear. So the distance between the check that you enter versus what clears the bank could be quite substantial if you have electron, but you have the added checks to help you to check off and reconcile the check numbers. But if you have then transfers, electronic transfers, you won't have that added check number to help you to figure out which is which. But you do have, in that case, the you do have the date which should be more relevant within three days you would expect on the electronic transfer. So we're gonna say this is gonna be equal to the 126. And let's make this, I'm going to make it a negative. So everything's a positive on our, on our sheet over here. Now these two are going to be a problem for us because this is, notice this adds up to that $5 thousand difference. So these two are two items that we don't see on our, on our books. And we'll talk more about why that will be once we do that, like once we reconcile this thing. But in essence, the reason that's going to be is because those were unclear transactions as of the last accounting system that we started and when we put our information in, we put it in as 25 thousand. We had those outstanding checks that didn't clear the bank last chyme that are this time. I'm not gonna I'm not gonna add those quite yet. I'll leave those as green. And I'm gonna say, yeah, there's a problem there and we'll go back and figure that out. Then we've got the sixteen thousand. Sixteen thousand is going to be Where's the 16? Right here we did the 12, here's the 16. Let's make those green. This is going to be equal to the 19. I'm gonna say negative of that 16. And then we've got the seven thousand. Seven thousand will be here. Let's make that. Yellow and say 7 thousand is here, I see that one is right there, negative of the 7 thousand, making that then green. Then we have the 68926892, which is right there. So I see that. Let's make that yellow, yellow find it. Then this is going to be equal to the 689 to negative of that number, making this green because we found it. Then we've got the 7272 is right there. This is gonna be equal to the seven to negative of that number, making that green. Going back on over gonna yellow five, this one making it yellow. Then we've got the 37 AT there's the 3780. So we've got that one on 1143780 negative of that number. Picking it up, we're going to green a phi that one. We've got that going back on over. Let's yellow five, this one. And then we've got the twelve thousand. Twelve thousand is going to be this 12 thousand. We had highlighted this one twice. I highlighted it last time. 12 thousand up here. I have 212,212 thousands here. I think I highlighted twice. I think I think this one I shouldn't have done last time. So this 12 thousand should be coming from this 12 thousand. There we go. And this is only going to one place That's going there. Okay? Then this one is gonna be this 12 thousand. So we got that. That mistake was made on purpose to show you how to figure this out as we go. And then 20 is gonna be that 620. So there's that, this is gonna be equal to the sixth 20. So we'll pick that up and this is gonna be negative of that 620. And then we'll yellow phi that, yellow phi that and then we've got the fifteen thousand. Fifteen thousand is here. So there is that and we've got this one on 626 negative of that 15 thousand. I'm gonna skip a couple of, couple of lines here again. And this is gonna be then because that's the last one that we see. In other words, I'm not going to see these two down here, the 15015 because I don't have the withdrawal. I didn't enter the withdrawal and I didn't enter the service charges because I didn't know about them and these items on our books, but they didn't clear the bank yet, which I expect to possibly be the case because they might be outstanding items. I can check to see if they have cleared in the following month, which we will see shortly as we do that because usually when I do the bank reconciliation, it'll be sometime after the month for after the month. So I can check the following month in February. But I really just want to see what those outstanding items are, not just so I can check on them, but so that I can reconcile the whole thing given us that Double-check on everything that has been entered into the checking account. So I'm gonna I'm gonna call this total, this copy this down here, and put this down here and say this is gonna be total, total clear checks and so on. And then I'm going to sum this up equals the sum of these items. There we have it. And then we'll call this. This is gonna be the cleared, cleared balance, which would be equal to, we're going to say there's gonna be a problem with it so far, but this is what we have this far, this 25 thousand minus or plus the deposits, minus the checks and other decreases. That would be our cleared amount. The bank amount bank bank ending balance comparing it to the bank is at the 61241 or 242, let's say 61242. And I know I should do this to the penny. But again, we've rounded a lot of stuff, but we're not doing it to the penny. This minus this then is going to be that 165. So this is the difference of the 165 and that 165 is the 15015. Now as we look at this, you might say, well, wait a second, something's weird here because I started, I started with with 25 thousand instead of 30 thousand. And I didn't check every I didn't check everything off because those aren't the only other things I didn't check off. I didn't check off these two, the 5 thousand. And you can see those two in essence net out. Meaning my beginning balance was off by 5 thousand and then I didn't check off these two right here, which I should have for the 5 thousand. That's basically what our differences. So those two errors in essence our netting out so that you can, and that's often the case in the first bank reconciliation. I'll try to make that more clear in the following presentation. We'll continue on. Let's just do some formatting for now. I'm going to format this. Let's make it all blue and bordered. Make it blue and border. If you don't have that blue, it's down here. We're gonna go to this blue right there. And then let's make this blue and border, blue and bordered. So there we have it. And so that looks good. So that's what we have thus far. That's kinda how the QuickBooks software will work. Now again, we'll fix this, we'll adjust this and we'll try to say, okay, what are we gonna do with these beginning balance difference? What, what is that and how can I kind of think through that in my bank reconciliation? And then what do we do with these items down below? Now, we'll also think about it as you would probably see it in a book problem, which would be to make the comparison between our books. So we'll do a side-by-side book balance and the adjustments, bank balance and the adjustments. That's not what you often see an accounting software because they usually set it up like this, which is a little bit easier when you do a database program. They kinda, and then they create the bank statement in any book adjustments that we have which would include these two items, we would just have to enter into the system. We would have to enter them in. We'll talk more about that later. We'll talk about the beginning balance will do the more Format, format that you would see in a book problem. And then we'll actually enter the transactions and the adjustments that we will then found have found including the bank service charges in the withdrawals into our system with the journal entry. 3. Bank Reconciliation Month One Part 2: Excel accounting practice, problem, bank reconciliation, month one part to get ready because we're about to excel. We are in our Excel worksheet. In prior presentations, we put together the worksheet from a blank sheet. Now we're continuing to enter transactions into it if you have access to it, There's two tabs on dam blue. There's the example tab in the practice to have the practice to have starting out where we left off last time. The example tab in essence being an answer key, let's take a look at it now. In prior presentations, we looked at the putting together of the bank reconciliation process, comparing the bank statement looking like this. This is our mock bank statement to the books, which is going to be our book balance here in the checking account. This is as of the second month, however, and we're first gonna be reconciling the first month. If I go all the way to the right, then we have been adding our data. We copied in essence the general ledger from the first month. So we got our GL from the prior month, we got from the prior worksheet which ends at the Indian point of that period, which was the 88645. And we constructed basically a worksheet that would be seen or similar process that you would see. Two, a worksheet that would be in a software system. This is what you would expect in a QuickBooks system on how the bank reconciliation would be constructed. It is not the actual reconciliation itself is how you determine what are going to be the items to create the bank reconciliation report. Now we're gonna continue on and create the bank reconciliation report. And we'll also deal with that beginning balance issue we saw last time, which is quite common, and something that you'll have to deal with both an accounting software and when doing this kind of process in Excel. Not a problem after doing the first month of reconciliation. Back to the practice tab, let's hide some stuff I'm going to hide from the skinny column y all the way over to a right-click. Let's hide that stuff. And then I'm gonna go all the way to the right, which is where we've been constructing our information all the way on the right-hand side. There we have it. There's our checking account that we've been putting together and we basically went ticking and tying off the activity that's in our bank statement compared to our books of the banks bank statement compared to our books. And so we tick and tied them off. And if we had the beginning number here and we matched everything out, that is on our books and on the bank statement, then our ending balance would have to match because we would just basically be reconciling the same, a little calculation up top beginning balance plus the additions minus the subtractions would give us to the ending balance. Our problem is that our beginning balance is different on the bank statement then it is on our books because when we put this on our books, we used whatever the balance was that was in our prior system in the bank account in order to apply our beginning balance. If we had any bank reconciliations, then, then we might have some outstanding checks and ore deposits. Deposits in these case outstanding checks. Usually oftentimes you can kind of see that. You can see that if you had bank reconciliations in the prior system, if you weren't doing bank reconciliations and the prior system, then it'll often wash out and you'll be able to see it when you reconcile here. And you can say, okay, there's the 30 thousand different by the 5 thousand, I checked everything off and I couldn't find these two which add up to 5 thousand, that being the difference because they cleared the current period even though we wrote them last period, which was in the last accounting systems. So that means that the beginning balance that we put in the books at the 25 thousand isn't actually the cleared balance. That's the balance that we had on the books that hadn't yet cleared at that point in time, 30 thousand would be the balance that had been cleared and then the difference to reconciling item as of that beginning point would be these two checks. It hadn't been included. How can I represent that then? On my on my system so I can I can kind of see what happened from the starting point, meaning I could just leave it the way it is and these two kind of wash each other out. That problem washes itself out. But I like to show it here in the system. So what I would like to do is say, Okay, I'm going to add the two checks down here. And kind of imagined that I'm gonna be putting the checks in the system as of the prior period, 1230, the prior year, 2 thousand the last year, and then they'll rule in from December to January into equity if there were any income statement accounts affected. And that means that I can add the detail that will clear here. And then my beginning balance will actually be then the proper beginning balance of 30 thousand. Let's see what that would look like. So for example, I go down here now if I was in an actual QuickBooks system or something like that, I might go into the prior period and add these accounts, add these items into the prior period as of December, the prior year, and then adjust my beginning balance to 30 thousand the two transactions netting out. Here I'm just going to show it on the bank reconciliation. So I'm gonna add two columns here. I'm going to select these two rows here, not columns. Right-click and Insert and shift these cells down. And then I'm gonna call this, let's call it 1231 and prior year PY 1231 and say prior year. So these are as of the prior year, they're not gonna be on my activity in the general ledger because we started as of January. These are on the books as of the prior year, and these will be those two amounts of the 104 thousand. So I'm just gonna put 100004 thousand there. And then if I add up my total down below the total checks and decreases, I'm going to make sure to pick those two so that we have our decreases and there we have it. So that looks good. So now if I go back on over here, we've got the 30 thousand at the start. Now that I've added these decreases here, I can change this to the 30 thousand. We're kind of at the same point. That's why those two things washed out. I've got the decrease of the 5 thousand here, and I was at 25 thousand. Now I go back, this should be 30 thousand. The amount that had cleared at the end of the prior period, which we're not looking at because that was in the prior accounting system. And then we had these that in the current period that were outstanding as of 1231 of the prior year. Now now I'm kind of see how this ties out. You're saying, okay, there's the 30 thousand and then we've got the additions. One hundred and forty three hundred seventy about because we got rounding one hundred forty three hundred seventy one on the addition is thirty one hundred forty three hundred seventy one. And then the subtractions Woodward 1664, doesn't quite match this item, not due to these two. I can yellow phi these two, these two are fine now, but due to these two down below the 15015, and that's why we are off by the 165 now we're off by the 165. Let's make this blue and bordered. Now, before we make that adjustment, let's, let's kind of take this and make the actual bank reconciliation as you would see it in a textbook kind of format. Notice an accounting software I couldn't reconcile until I fixed the difference, meaning entering the difference on the bank statement into our books. We'll do that next time. But now let's see how we would put this in a book type of problem. How a book type of problem would represent this. So typically, you'd have two columns. Let's add, I'm going to add a little bit more space. I'm going to put my cursor on column HJ and just scroll over two all the way over here, right-click and insert. So we've got a little bit more room. Alright, let's make this one a little bit smaller and make that a skinny. And then I'm gonna say this is gonna be the book balance. Balance. And we usually compare the book balance, making this a little bit larger to let's make, this one is skinny. We're going to compare that to the bank balance. So we've got the bank balance, balance. And this is going to be the ending balances that we're looking at now and we're going to reconcile the two of them on the book balance. The ending balance at the end of January is going to be this 88811. That's where we left off at the end of January. And on the bank statement, the Indian balance was the 6124116 and 6340 to 61242. About. Then we're going to we're going to try to reconcile the two and we're looking at the differences in trying to say is that difference is going to be something that, that is our issue on the book side or on the bank side. The differences that we have, we've got these two differences that are on the bank statement that are not on our books. If it's on the bank statement and not on our books, it's usually our problem, meaning we're gonna have to add these to our books because the bank is usually correct. If the bank is not correct, then of course we're gonna have to talk to the bank and see if we can get it corrected. But oftentimes that's the case. It's our problem. We're gonna say that those two are going to have to be included in our books. So I'm gonna say we have the withdrawal with draw. Let's say this, let's say checks and decreases to try to categorize these. And then we've got the width to roll. The service charges, which were the withdrawal was 15015. That's gonna give us the total, but leave a little bit of space total check decreases. So there we have that and then I'm going to make this a little bit larger. Let's put an indentation alignment indent. I'm going to sum those two up equals the sum. That will give us. Then I'll leave a little bit of space down here. Let's put it down, down here somewhere. Let's bring it all the way to 13. This will be the adjusted book balance. These adjustments, we're actually going to have to enter into our system. So we started with the 88811 minus the 165 that we don't have in our system, that we're going to have to put in our system. Then on the bank side of things, we had, Let's call this out. Standing checks and decreases. Let's put a colon after that. Colon. After that. We're going to pick up all the stuff that we didn't checkoff over here. Everything that has not been green are now the items that we are on our books that aren't on the bank statement, we assume them to be outstanding, meaning were correct. The bank statement just hasn't cleared them yet. We can verify that by checking the bank statement in the following months to see if these items have cleared. If they have, they're just timing differences. And that's what we're looking for really with the bank reconciliations. We're gonna say, let's pick these up. We'll say, let's see if we can pick up the date. We'll just do it by date over here. So these are the checks. I'm not getting that deposit. I'm looking at the check which is the 500. Let's see if I can format this. I'm going to format these in a date format, like this formatting. Let's do a Format Painter and bring over that date formatting. Like that. We got we got 126126 is going to be here. Let's hide some sales and make this a little bit easier on ourselves. Let's hide, let's hide from, from this cell on over to this. And hide right-click and hide putting these side-by-side. So there's the 126. And then let's make this, let's make everything positive. Flipping the sign, making that positive. Okay, So now we're gonna say the next one is going to be the 126. I'm gonna say negative to flip the sign of that for ten. And then we had another one that we didn't pick up down here on the 130. I'm gonna say negative of the 3572. And then we had another one down here which was on 130 negative the 1856. And then negative of the next one, which is the 130. Hold on a second. Not negative of the 130. Then negative of the 1030. And then we're gonna say equals the last one, the 200 and then negative of the 200 here. So these are all the ones that were decreases that we've wrote that didn't clear the bank in January. So I'm gonna leave a couple of spaces in case we have anymore. Let's bring it down. Let's bring it down to here maybe, and we'll call this then the total outstanding checks and decreases in debt that was put an indentation. Let's sum them up. So let's actually, I'll put them in the same column here. Let's sum them up equals the sum of these items. Then we're gonna have an outstanding deposits. Outstanding deposits. Let's use the same format in here. I'm going to format this and then I think we only got one. I'll do, I'll do a couple of cells here just in case we have any others. That's gonna be the 125125 would just have that one right there. That looks good. And so I don't need I don't need a subtotal. Just keep that as is since there's only one. And then we'll call that then the adjusted, adjusted, the bank balance, which is going to be equal to the beginning number. And then the stuff that we know about the bank doesn't the outstanding checks minus the outstanding checks plus the outstanding deposits. There we have it. So there we have those two. Now let's unhide these cells from HB to HM, right-click and unhide. Now, if I compare these two, let's pull it, Let's pull this one down. I'm gonna, I'm gonna grab that one and pull it down here. So there we have it. So now you can see that we reconciled. If I look at the difference, difference, there is no difference between the two. And so we've done our bank reconciliation. We know what, we know what the difference is between the Indian bank balance and the ending book balance. But in order to know what that difference is, you got to find out which are the outstanding items. And to do that you've gotta do just ticking and tying type of problem. That's over here. Now, if you use accounting software, all you really do is this ticking and tying process. And then the system can kind of put together the bank statement, which is in essence this report. However, you can't, most accounting software systems aren't going to that you can't just leave these items over here. These items represent adjustments we need to make an our books, meaning we're recognizing that we were wrong on these items. Not really wrong. We just didn't know about these items. We could have been wrong on some of them, but we didn't know about these items until we got the bank statement. We didn't know how much the bank charged us with the service fees. Let's indent this until we got the bank statement. So now that we do know about them, if it was a QuickBooks system or accounting system, we would have to enter them into our system before we reconcile. And that would leave us with just these Indian balances here, which would be the bank reconciliation. This side should be the bank reconciliation in essence, after we adjust this side, which is the things that we need to fix because they were on the bank statement and correct and not in our books and therefore needs to be included in our books, which is what we'll do next time. Let's go, let's go ahead and format this. I'm gonna select these items and say let's put the brackets and put some, put some formatting there. And so there we have it. So we've got our ending balances, tie out. We can put a double underline under these, maybe make it a little bit more fancy. There we have that. Let's do a spell check just on these items that misspell a bunch of stuff here. Deposited deposit, outstanding deposit. I think I just want no D I'm not change. That's not too bad. Pretty good. That's not like one word. That's a problem. There we go. So next time we're going to go back in here and then we'll do the adjustments for these items which will eliminate this half of the bank reconciliation because we will have fixed, there won't be any errors on our side because we will fix them, these will go away and then this will be our bank balance. And the book balance will then change to be the proper book balance after having made these adjustments. 4. 9042 Bank Reconciliation Month One Part 3: Excel accounting practice problem, bake, reconciliation, month wound part three, and get ready because we're about to Excel. Here we are in our Excel worksheet and prior presentations we put together the worksheet from a blank sheet now continuing to enter data into it, if you have access to it, There's two tabs on down below an example tab at a practice tab. The practice tabs starting out where we left off last time, the example tab in essence being an answer key, we're gonna be continuing on in the practice tab this time, scrolling all the way to the right to see where we left off and our creation of the bank reconciliation. We're going all the way to the right. We had in essence completed the bank reconciliation, as you might see it in say, like a book type of problem. We compared the bank balance and the book balance, looking at our mock bank statement over here. To do so, we started off by looking at our detail in the checking account for the first month that we got from a prior worksheet that had the detail for January. We ticked and tied everything off from our statement over here, from the bank statement and on our books, leaving the items unchecked, which are they going to be the items are ungraded side in this case, which are the items that hurt the outstanding items. And then we constructed in essence, what you might construct basically from a, from what you'd seen, a QuickBooks type of salts where some type of software in accounting software typically that would confirm the cleared balances, starting with the 30 thousand we had up top, that's gonna be the beginning balance typically from the bank statement which we had to adjust for the beginning balance due into items which were outstanding in the prior period, which shouldn't be as much of a problem going forward to the next bank rec. Although we do want to think about the next bank rec and how these outstanding items will impact it. And the next one. So we will do another bank reconciliations. So you can see that. And then we can see this reconciliation which will reconcile down to then the matching. What will be on the bank statement if we had adjusted for those last two items. So there's two more items here that we have not adjusted for that being the withdrawals and the bank service charges that we need to add to our books in order to complete this bank reconciliation. That's in essence what you would have to do in accounting software like QuickBooks or something to complete the bank reconciliation. If you were doing a book problem, you might do the bank reconciliation and see it thusly this way. They'd probably tell you what the differences are and then you'd have to decide is that on the bank side of things or the book side of things. So we've got our book balance, this being the ending balance. We've got our bank balance now being the Indian balances, not the beginning balances. And then we're trying to reconcile what the differences between the two. And we know that these two differences are on the bank statement, not on our books. These are the things that we're going to have to adjust for. These items. Over here are the ones that are on our books that are not on the bank statement which we determined in practice, we would have to determine by actually ticking and tying them off in some way, shape, or form. And in a book problem, they'd probably just tell you what the outstanding items are and those are going to give you the reconciling items so that we have now reconcile down below. The next step is going to be that we need to fix our books for these two items that were on the bank statement, which we're not on our books and we're going to add them to our books. So that's what we're going to do now. Once we do that, then our book balance will change to be the correct book balance after having adjusted for these, meaning this balance to 886406 about and will no longer need this side of the reconciliation. And we'll basically have the adjusted bank balance will then tie out to the adjusted book balance down here. And this side will be in essence, all we have for the bank reconciliation, which is the report that you would typically get and see from a QuickBooks software after the reconciliation had been done. We're going to add these two items into our books. It's gonna be a little bit funny because we're now in February right now. And these two were imagining to have happened at the end of January. So we're gonna make these adjustments as of right now when we're moving forward at the end of the period. So i'll, I'll show you why. That's a little bit funny in our worksheet here, but it'll, it'll be fine. Let's go all the way to the right and add these two items to our books. I'm gonna go all the way back to the right and do a couple of journal entries, journalizing some journal entries. I'm going to unhide some cells back behind z here, right-click and unhide so we can see where we're going to enter these entries down at the bottom here. Let's then hide from T, the skinny from TEA on over to a, a to T at 80, right-click and hide those items. And then we're going to be recording these two. So let's say that we're going to record the withdrawal. If we withdrew money from the books, then the question is if you take cash out, the question is, what did you use the cash for? Now oftentimes that you set up a bookkeeping system, you usually Want to be drawing money out only when it's for your personal purposes. And then you can make the draws be like a draws account. You taken money out of the business. But if you take money out for business purposes, then you'd have to track the receipts that you're gonna be spending it on. That's why it's a problem because you would rather have the actual audit trail for the expenses because you want to track the expenses so that if you get audited for something like a tax return or something and a deduction, you have the audit trail from a check or from a credit card payment. But if you pay cash, that's the problem with cash. So cash is not as trackable is a problem with cash. You would think that the draws that would come out you would want for your personal use. We're going to assume this time we use the cash for some business purpose. We don't know exactly what it is and we're going to put it into miscellaneous. So that's what we're going to put it into miscellaneous expense. We're gonna put miscellaneous in alphabetical order. So it's gonna be around here. We'll put it right here. Let's put it right there because that's what it would be like. It would be in alphabetical order if we put it into a QuickBooks system if we weren't using account numbers. Oftentimes if I had a choice, I would put it towards the bottom. Since it's a miscellaneous category, that shouldn't be as important of a category because typically it should be fairly small. But in any case we're going to say Insert, shift the cells down. And I'm just going to call it a abbreviation in my SC extents, zeros to start out with starting points at 0. And I'm gonna be picking up the debit's gonna go to miscellaneous expense in the other side's going to go to the checking account, to the checking account right there. And so that's going to be indented alignment indent for the amount of what did we say? It was like 150. I think it was 15150. There's the debit, there's the credit. Let's post it now. So we've got the miscellaneous expense here, which is an AC 28 equals that 150 in the balance up to the 150 for both the month of February. Now notice this is where it's funny. It's not really in the month of February. We enter this as of this should be as of the end of January. So notice we're entering this this point in time. It'll be right at the ending point in time. But really this is something that should be entered back in January. If you were using a QuickBooks system or something like that, then you probably wouldn't close the month out. Meaning you're not gonna you're not gonna put anything into the prior period until after you make the bank reconciliation. So usually the bank reconciliation is the point at which you then say, I'm not gonna I'm not gonna post anything back into the back dated information. Of course, posting something back in the prior period after you've already entered data in an Excel sheet is going to be a little bit more difficult, so it'll still be fine at the ending balances. But notice we've got this little kind of *****, this little kind of problem with regards to the transaction for the current month. We're focused on the year to date with regards to this trauma syndicates, we're gonna say the checking account is up top. Checking account is going to be the credit of the 150. There we have it. So it's going back down again. We're looking at the Indian balanced number in essence here on the balance sheet. Then we're gonna post it. Let's post it on out to our, to our GL as well. So we're looking miscellaneous, I have to add that after the internet. So we're gonna go to the right and see if I can find that. So we're all the way to the right in the expense accounts, there's the end and I got a space right there ready and waiting for it. So perfect. Perfect. We're going to copy that. We're gonna put that down here just for the formatting, going to delete the activity, we're gonna put the name and CGI 14 equals left till we hit that account, we're going to pick it up the account. I don't need to hit the wall. Picked up the miscellaneous expense. That's the one we want. We're going to record this again. I'm gonna put the date here. It's going to be recorded as of 131, which is last month. So that's kind of where the little problem is here. Because really you would think that would be like in the beginning balance here. But I'm going to put it in 131 because I have to put the dates in a chronological order given the way the Excel sheet is going to be working unless I make it. So we'll keep it at that. So we're in CH 17 equals left to the wall. We will then pick up that amount over the 150 the other side go into the checking account, but I need to add that miscellaneous account now to my check figures up top and the g to the L check figures. Let's do that. I got to add it here. I should be out of balance here. So I'm gonna double-click here, go to the end of it and say plus, and pick up that amount that we have added. We have added it miscellaneous expenses down here in CI. So 24 Enter. Now we're out of balance there and I need to add it to this check figure two. So we've got to add it to that one. We're going to go back on over here. This is comparing the net income from the general ledger accounts to what's on our trial balance has another check fig. We're gonna say there it is, the check fig. The 4805 for the year to date number matching the 48 O five down here on the trustee trial balance. Record the other side to the checking account. The other side was down here in the checking account. Check-in, check-out, the check-in and say we want this down here at two this is at 131. Again, that's funny at that funny date out-of-order. Not going to bother us. I'm not I'm not bothered by that adult. It doesn't bother me. That doesn't bother me. That's at the 957. Seven ninety one ninety five hundred seven hundred ninety one here too. So that looks good. Let's record the other one now in 228. And this is gonna be bank service charges or some kind of service charges that we have. Let's call it bank service charges. So we'll put that up top right here when I add another expense account. And these are for the service charges to $15 at the bank, just they just charge you and take it out of your account and like all right. Whatever whatever the charge is, I guess I guess I signed something that that's what it was. Bank service charges, charges, zeros, 0. Then we'll put that down here. We're going to have to add this one. This is gonna be equal to the bank service charges. Other side go into the checking account, the checking account. And we'll go to the account and alignment or alignment and indent. And then let's put that into the bank service charge in AAC 27 equals hold on a second. I don't have I didn't put the number theory and I got to put the number here. It was for $15, I believe. Not 150, just 15. The bank didn't charge is 15015. We're at the bank service charge up top. We are in cell AAC 27 equals that 15. And then the checking account up top checking account up top, double-clicking on it, go into the end of it and plus, and picking up once again that 15, putting us back in balance on down below. And let's record it now I got to add another account for bank service charges after the cost of goods sold. So I'm going to go to the cost of goods sold. I need something like right here. I'm gonna put my cursor on the skinny, go over to the AC control C, put it on this skinny. Right there. I can't. There we go. Precision. And then I'm going to delete the stuff that's in it. Delete the stuff that's in it. I don't need I don't need the one on the bottom. I'm just going to remove this by first making them just normal, blah, cells, Home tab, paintbrush it just make them normal cells and then delete it. And then we'll go up top and change the name up top. This is going to be for the bank service charges that we just created right there. Enter and this once again, is that that funny date 131, we're on CH50, x5 equals left till we hit the wall. We're gonna be picking up that new account that we set up, which was the bank service charge. There is that we got to add this account to our check figures. Now, we'll go to our check figures to add them there on the GL check figs. Double-clicking the check fig, just check figs are just as out-of-control. Long formula. It's out of control. There's no control in it. It's in control. This is in control. I've got it. I've got everything in control. 15 right there. And then we'll pick up the next one. This needs a check feed comparing the net income on the general ledger and on the trial balance, we got to pick up our new account in that one to this one. This one is 15 to enter. That 4790 matches the 4790 down here. So we've added those two items. We have now added those two items to our books right? Now our ending balance right here doesn't really tie out to the balance here because my trial balance is being ran as of the end of February at this point in time. So we're looking February numbers. So what I got to do then is go back to my bank rec go back, hold on a second. Something's red over here. There's a red 15. Did I put I didn't post the other side of the checking account. Did I not post the other side of the checking account? I did not do that. See check figure. Found it saved my life. I almost died from that. Then on AGE 22131, we're in a age 22 equals left to the wall. Scrolling down. We're going to pick up 15 Enter. So now we're at the 957079. That should match the 957079 here, and we're back in balance. We were in balanced before. Okay, now, let's go back to the right and say, well, what does that do to my bank? Rec It got to make my bank rec my bank rec. The bank rec sounds like it's going to wreck the bank, but no, the bank rec is not actually a wrecking of the bank process because it's short for reconciling. Reconciling. Now what I need to do is add those two to my running balance here because this running balance is for the month of January. So I got those two other things that happened down here, 131131. Let's copy this stuff down. Just copy it down two more and we've got 131131. And then we had the 150 and the 15, negative 150 and a negative 15. So as of the end of the month, these two are the attitude items that I have to put in place, resulting in the balance indeed now at the ADH6 for six. So now those two items then we could say those two items should be included right here. In my my reconcile. This is what you would do in a QuickBooks setup. Now I fixed it in my books, which means it would show up over here as something that would be able to check off. We're going to say that there's that 150 now. And then there's the other 15 that we've just put into our books to fix it because it was on the bank statement and not on our books and we just went in there and fixed it. So now we can just check off or yellow phi, which is our form of checking off yellow fine. Those two. Then that puts us in balance. So now we've got the cleared balances, the 30 thousand That's matches the 30 thousand that is here. So that looks good. And we took care of that beginning balance issue. And then the one hundred forty three seventy one is the additions that we have. And then the subtractions are the 1118 to nine. And those are these fix that one giving us our ending balance and the 61240 to about 61242. In practice, you would like to get it down to the penny, by the way. I mean, because any kind of deviation could be a multiple items that you're missing. But in any case, we've removed the pennies, so we're not doing that. Then if I go over here to my bank rec, this, remember this process of doing this is not a bank reconciliation. This is not a bank reconciliation, this thing, because this is the process of giving us the information to tell us how to do the bank rec, which means that these is built from these outstanding items. These outstanding items of things we didn't check off are the ones that are gonna be used to construct a bank, the bank statement. So if I was to then say in a QuickBooks system, okay, this checks out. Now make the bank reconciliation. It's not going to add this part to the bank reconciliation, But this isn't really the bank reconciliation. The bank reconciliation is the unclear items. Then over here on this side, I'm gonna say this is no longer a problem. I don't have this difference anymore. Those differences are gone. So this starting point is no longer 88811. It now is going to be equal to the ending balance that we have down here, the ADA 8646, because we adjusted it, we fixed it. Now our book balance is the ADH6 46. We don't have any adjustments to the book side of things because if we did, we would fix them. And therefore we have the same ending balance. Therefore, this is really the bank reconciliation, this side over here, which has taken the bank balance as of the Indian date 61242 about and then showing us what the differences to get to our book balance, which should normally just be the outstanding checks and the outstanding deposits to get to the book balance of the 88646. You don't need this left-hand side because this amount should now match the book balance if you had fixed basically the book balance. So that's the general, the general idea of it. So that would be it. So now next time we'll do the bank reconciliation for the second month and we expect them these outstanding items that are here in this month, generally to clear in the next month, they don't have to because someone might take a few months to clear possibly, but you would think those would clear next month, we can check to see if these checks are cleared and that gives us a little bit more security that things are going in the way they're supposed to go. But again, our goal is not just a check on these few items to see if they are cleared or not. This item, which is a big item we'd like to see if that cleared, but also we want to just be able to reconcile because the ability to reconcile gives us more confirmation that everything else that we did, everything that we have entered has been double-checked, verify with an external source, the bank making the checking account, the whole balance, every transaction more legitimate or given more verification that it's correct. And that also because the cash against the lifeblood of the organization, means that the other side of every transaction involved in the double-entry accounting system, which will impact every component of the cycle, revenue cycle, sales cycle, the purchasing cycle in the employee cycle has a better internal control for it. 5. Bank Reconciliation Month Two Part 1: Excel accounting practice, problem, bank reconciliation, month to part one. Get ready because we're about to Excel. Here we are in our Excel worksheet and prior presentations, we put together the worksheet from a blank sheet. Now we're continuing to enter transactions into it if you have access to it, There's two tabs on down below an example tab at a practice tab. The practice tabs starting out where we left off last time, the example tab in essence being an answer key, let's take a look at it now, last time we looked at the bank reconciliation for the first month, now we're gonna start the bank reconciliation for the second month. It usually be an easier given the fact that we don't have that beginning balance type of issue. But it's a good practice to do because we could see the impact of the outstanding atoms last time. I'm going to scroll to the right. That hadn't how they will impact the bank reconciliation for the second month. I'm gonna look all the way to the right, which is where we're going to be constructing our bank reconciliation. This is the prior one we did last time for January. We are now on February. Similar type of process. We're going to be pulling over the general ledger account in essence, looking at the detail for just the month of February, but we also going to have to take into consideration those outstanding items that were in the prior bank reconciliation that had not yet clear. So we got to think about those when we go into the current bank. Reconciliation will do the same process. Thinking about it first, kinda like how it would be set up in a QuickBooks type of software or something like that to help us with the process of reconciling in a worksheet like this. And then we'll do a format that you might be more likely to see in a text problem, in a textbook type of problem. And then we'll get to that ending bank reconciliation that will be generated typically from software and or that she could come up with in a textbook type of problems. So let's go back to the right side and get this thing set up. So let's do some cleanup work here. I'm gonna take these ending balances on the left-hand side. Let's copy those ending balances Control C, I'm going to put them into our beginning balances right-click and pasting 123. Let's delete the items in the middle so we can focus in just on what we're doing on the current data. We can then hide the cells on the left. And so I'm gonna go from y all the way to the wall. We don't need any of that stuff quite yet, so I'm gonna hide those at this point. And then I'm gonna go all the way to the right. Now we are looking this time at the ending balance, which is currently as of the end of February, the 957079. We can also find that of course, on the checking account in terms of the number, the 95779 here, we're comparing that to our big statement. This is gonna be our bank statement where we have the beginning balance here now being the same as the Indian balance for the prior month. The additions, the subtractions, the ending balance, the detail on down below. Let's go back on over and we're gonna go to the right and give us some more space that we can work with all the way at the right. So we're gonna scroll all the way over here to where we're constructing. We have a little bit of space here. Let's add some more room. I'm just going to add some more cells. So we got some space to work. Going to need quite, quite a bit of room. So we're going to right-click and insert some more columns in here. And there we go. So we're gonna start off. Same thing we did last time, which is pulling over our detailed information. This time for the month of February, which is on this worksheet. So I'm looking for the GL account. I'm going to pick up the GL account over here to get the activity. I'm just going to copy and paste it, although we'll have to paste it specially so that we don't mess up the data as we pull it over. So I'm just going to copy the GL. This is for February. Here's our starting balance and then we roll down. Although again, this starting balances of little deceptive because you'll recall last time we enter these items for January down here due to due to us during the two bank reconciliations at the endpoints. So we've got to be a bit careful there boat, I'm gonna copy this, copy this whole thing, Control C, and bring this all the way to the right as our basis point that we'll be working with all the way on over to the right there we have it. Let's put a skinny right here. We'll put a skinny right there. And then what gonna paste it? I'm gonna paste it 123. I get the values and then I'm going to right-click and I'm going to paste the formula so I get the formulas and then I'll not the formulas, the formatting, the formatting not the formulas. And then I'm going to reenter the formulas just for the running balance here, which is gonna be the prior balance plus the activity. And then just copy that down. So we just recreated our balance here and the ending balances at that 95, 77, the 95779. So now we're going to we're going to take a look and construct a worksheet similar to this worksheet. Let's see if we can possibly just copy this over. I don't need to really compare these two cells here. So I'm just going to copy this whole thing right there. We'll copy that and try to pull this over. So we got the same kind of formatting. Let's make another fairly skinny column here. And I'm just going to paste that. Let's just paste it normal right there. There we have it now the deposits, I'm gonna remove these now. I'm going to remove the detail. And I'm going to remove the detail down here in the clear transactions. And now we've got our worksheet. That we could just pull our information from. And so let's work this out now. So now this would be like if you were to go into a software like QuickBooks and say, let me do the reconciliation for the second month. Then it would start off, it would typically give you the beginning balance, which would match last period's ending balance, which would be very easy now 61 to 41 in our case, we could do it this way. This is going to be equal to the ending balance last time. So the ending balance last time for the bank statement or the cleared balance, she might call it. We could say that cleared balance is this 161242 about red. So that's gonna be the cleared balance that we left off with last time in our basically in our worksheet. And then we're going to have the activity that we're gonna be ticking and tying off from. Now we have the added complication now that we don't have just the data in the month of February, but also these outstanding items these outstanding items have not yet cleared. We would expect them to clear this time. I've got my current data that happened in the month of February and the unclear transactions. This is from my bank reconciliation that would also be added. It would also be in the group of things that I can pick from when I'm doing my ticking and tying and comparing and contrasting from the bank data to the current data. If I go back on over and I said, okay, now I'm gonna do my thing where I'd basically compare and contrast because I'm at the same starting point and I'm going to look at my deposits. I'm looking for the 3622. So we're looking for the thirty four hundred seventy two hundred fifty and the deposit there it is. Let's go ahead and make that green. And I'll go screw up top. And these are the clear deposits which are going to be equal to starting at that one, which was put in our books in the prior month, but cleared in the month of February. So we're gonna bring that one over. That looks good. That's the only one from the prior month. It wasn't in the current data. Everything else should be in the current data. So I'm gonna go ahead and make that. Let's make that yellow 12250. So we're looking for the 12250. There it is right there. Let's make that green and we'll pull that in. This is going to be equal to the 22, and this will be equal to the 12 to 50 there. Then we've got the four or 508. So four or 508, this is gonna be right there. So that looks good. We have that four or 5088. Will green a phi that one, making it green to check it off on both sides, then we're looking for these 750. Let's make this yellow 750 is right there, so let's make it green. 750. Pulling that over to my worksheet, 750 equals 750. And then we can go back on over and say we found the 750, making that yellow. We're looking for 400 now there's the 400. We're going to make that green and check it off, which is what the green kind of does. That's what the green means. The meat green means checkoff. There's the, there's the 400. Now these two we don't have we have on our side, they haven't cleared the bank yet now this one you would expect it to have cleared because that's kinda old. So we would want to double-check those and make sure that they have cleared in the following month. But we're going to assume that they're going to be outstanding, they're gonna be reconciling items. Let's go to the other side of things now these are gonna be a little bit, There's a couple of them that we're a little bit more confusing, that you'll see some problems if something's grouped a little bit differently on the bank statement as our books that will have to kind of figure out. So we'll have a couple of little adjustments so we'll see those problems. So we've got the 121012, this is the 3572. We're just going by the amount and the date. In essence, we're looking for the 3572, that's right here. And notice it was outstanding last time we wrote the check in January. It's now clearing in February. So this one is clearing in February. So we're pulling it basically from the outstanding items from last time that hadn't yet been cleared. This is where the added wrinkle comes in, which is kind of easy to do within a QuickBooks system or accounting software because they would just be lined up in the things that you could check off that hadn't yet cleared yet. But this is maybe given a better conceptual idea of where those are actually coming from, how QuickBooks is constructing them. So we're going to then say, okay, let's check that off then we've got the four hundred, ten, hundred ten, which is right here. So I'm gonna check that off. This is gonna be something that we wrote last period. So that's gonna be equal to the 410. There's the 410. Then Let's check that off. We have the 1 eighth, 1 eighth, 56. There's the 1 eighth, 5 sixth. Let's make that green. And we're going to bring that over. We wrote that last period and it's clearing in the current month. So there is that. Then the next one is going to be 200. So we're looking for the 200. That's gonna be over here. 200, that looks like this one. So I'm gonna make that green. And then we'll check that off. That has been checked off for the 210 as well. And then we're going back over. Let's make that green. We're looking for the one. 30. The 130 is right there. Notice the order doesn't necessarily need to be the same because if it's ordered by date on the bank statement and our dates might differ because they might have cleared, they might have taken longer to clear so that the ordering might not be exactly the same. And so we're gonna go back on over and say, okay, we found the 130. Now we're looking at the one. The 13581358 is, I believe one of these it's off by a dollar due to rounding. It should be down to the penny if you were doing this in an accounting system, but we rounded everything, so we gotta deal with the rounding issues. So I'm assuming that's the 1359 and let's flip the sign to make everything the same. This one was actually written in the current period and cleared in the current period. And I'm flipping it to make them all positive numbers over here. So we wrote it in February. So let's check that one off. Check it off. We're looking for the 180. So there's the 180 is right here, so we'll check that off. So that's going to be equal to, we wrote that on 228. This is gonna be equal to, let's make it negative of the 180 to flip the sign. And that is that once 180, then we're looking at the 40684469 about that one is not here. That's one of the ones that there's a bit of an issue with it. So let's take a look at it. The 1 eighth, 5 sixth 41856. So we have that one is right here, so I'm going to check it off. So that is this 11856, that one. Let's flip the sign and making it a positive. So that is that when I haven't found the four, then the 1080. The 1080 is right there. So let's make it, let's make it green. We've got the one 080 is this one. We will pick it up and make it a positive by flipping the sign. Now this one is the one that's causing us a problem. And you can see when some of these problems will be put in place. This is one and what we paid the sales tax. This item right here in our practice problem, Let's get this one was done. We paid the sales tax. Actually, we kind of mocked the sales tax in our practice problem when we put it into a QuickBooks software as if we are paying the state of California, which actually has two taxes and state and local tax. And so really there's actually 22 payments that are happy to hear that we combined together when we put it into our system here, you could you could find somebody's same kind of issues would be in there when you did the payroll. We talked about the payroll might be done in an outside system and then we might put it in our system in a lump-sum on the deposit side, if it doesn't get grouped together, we have the same issue kind of bear, and we have that issue with the sales tax here, which if the sales tax was done outside and we were trying to put their data into our system. Again, we kinda compile them together so that the problem is one of these cleared of course, and one of them did not. That's gonna be an issue. So what I'm gonna do is break this amount out to the two to the two amounts that reflect us play in the city. And then as pain, the state, instead of instead of just one amount for sales tax. I'm gonna highlight these. I'm going to right-click and Insert and shift down. I'm gonna make this then on 2281 of them is going to be for the one hundred eight hundred seventy five and the negative 1875 and negative 469. This is on 228 as well. And then this one, I'll keep blue. Well, let's keep them both. And then this one down here is the one that's going to clear that one's gonna clear somebody to clear this one. On to 28. Clear that one. I got to fix my running balance here. This is on 228. I'm going to copy this down. Copy the running balance down. I should end up at the same ending point that we had before, which was I believe that 95779, that should match what's on the trial balance steel. So in other words, if I go all the way to the right, I didn't actually change the ending balance from the general ledger all the way. We're still at the 95779. It looks like we're still good. I just broke those two out into the two components. I'm going to go all the way back to the right. You can see how tedious that is to do, to do those type of things. You wanted to try to put it in. You want to try to think about that while you're doing your data inputs. So you don't have to do those types of things. Then we're gonna, we're gonna go down and say, okay, there's the 1080. And then we picked up that last one, which is equal to the 469. I'm gonna make that then a positive number by flipping the sign. So that if I sum these up, we're at then summing those up, we're up to 11113. If I go over here, we pick that one up now 169, we picked it up. I'm going to make that yellow fide. Yellow find that one. We don't have these last two, the withdrawals and the bank service charges again. We then are at the 11113 Vs. Here we've got the 11th, 633. If we look at my Indian result, we're gonna say the balance is going to be the beginning balance, 61242 plus the clear deposits 5182 minus the checks of the 11113 and decreases comparing that to the ending bank balance, ending bank balance between the 101590, about 101590. So we're off by five hundred twenty-five hundred twenty one, about which of course is this difference that we haven't fixed yet. So if we were to put this into QuickBooks or some kind of accounting software, this would be the process again, not this statement right here is not a bank reconciliation. It's helping us to checkoff during the ticking and tying process in order for the bank reconciliation to be created, which would be created from the ticked off items, which would include this side. And it's still hasn't cleared Even though we wrote it in January. And then these unclear items as well would be used to create the bank rec. And we'll get more into that in the next presentation. 6. Bank Reconciliation Month Two Part 2: Excel accounting practice, problem, bank reconciliation, month two part to get ready because we're about to AC. So here we are in our Excel worksheet. In prior presentations, we put together the worksheet from a blank sheet now continuing to enter transactions into it if you have access to it, There's two tabs down below, an example tab at a practice tab, the practice tabs starting out where we left off last time, the example to have in essence being an answer key, let's take a look at it now. In prior presentations, we put together the bank reconciliation for month one. Now continuing to work on month two, we started out with the process similar to what you might see in accounting software, such as a QuickBooks to identify the differences between what is on our books and what is on the banks books. In essence, doing that by taking the general ledger activity for the current month that be in February, as well as the outstanding items, the items that didn't clear hadn't cleared the bank by the cutoff of the prior time period in our case, January 31st, those being these items from our prior bank reconciliation. And then we basically take and tie it and try to mirror the items from the bank statement to what we have. The starting point being a 61 to four to that matching the bank statement. And then we have the increases of a 51981 that matches the activity on the bank statement. And then the decreases here at the 11113, not quite matching what's on the bank statement, the difference then it's gonna be that 520 because my ending balance is at 102110, bake and imbalanced one hundred one hundred and ninety. So now we got to reconcile for those last couple of items that make up that 510, That's going to be these two items down below the 500 withdrawal and the bank service charges. And we're also going to put this into a format of a big reconciliation, starting out with something that you might see in a book type of problem. And then we'll solve or adjust for the book balance side of things. So that's where we stand now. We're going to go back to the practice tab. I'm going to go all the way to the right to where we're working at, will go all the way over to the right. And we're looking at our big reconciliations. I'm going to create our worksheets. So we'll create our worksheet over here. I'm gonna make a skinny, will make a skinny column. And this will be the actual bank reconciliation we're gonna be creating. We got the book, the book balance. Now notice in accounting software you often won't see this side, the book balance side of things because the book balance will be adjusted for, we're going to correct the book balance. And so therefore, once it's corrected, the book balance will go away. That side of the bank read, the book balance is going to be equal to our ending balance on the on the check register or what's on the balance sheet or the trial balance that 95779. And then we'll have the bank balance. It's like a skinny column here. Then we've got the bank balance, bank balance, and make this column a little bit wider. So we could see this stuff, the things that are on the bank statement that aren't on our book, the 520, those are kind of our problem. Those are things that we have to fix on our side, we will do that with a transactions, but for now, let's put that into the left-hand side to make an adjustment to our side of the books. We're going to call this checks and decreases checks and decreases the creases colon. And this is gonna be a width draw wool and service charges and make this one a little bit larger here. And that's going to be for the amount of it was five hundred and twenty five hundred and twenty, I'll do an indentation here. And that's gonna be the total, total checks. And decrease says, making this a little bit larger again, let's indent, let's indent twice here. And this then is gonna be the sum of those. Let's, let's actually, let's bring that down a little bit just in case we have some other items. Let's give it a little space, given a little room here. No need to crowd things. We got plenty of space. Let's make this one a little larger too. Okay, Let's sum this up. Sum this up there, we have it. And then I'm gonna put the adjusted balance again. I'm going to give it a little space because I think the other side is going to be a bit longer. And we're going to call this the adjusted book balance, which is going to be equal to the starting book balance minus these decreases that we're gonna have to put into place because they're on the bank statement and we take the bank is correct. So we've got to put them in our system to make our cis side Correct. Then on the bank side of things we got we've got the big side where they said the Indian balance for them was the 101590. So 101590. And then we've got, we're gonna call it outstanding checks, let's say, and decreases. We're gonna say let's make this one way larger so we could fit that stuff in there. And then let's put a colon at the end of it to, and I'm going to format these for a date format. So I'm gonna pick up the formatting over here and put the date formatting there. And I'd like to pick this information up from the items that we did not checkoff over here on the outstanding the outstanding items from last month that we still didn't clear. We wrote those in January and then the things that we wrote in February that haven't been checked off to do that, let's hide some cells. We can see this in a side-by-side a little bit more easily. We can make this as easy as possible. We're gonna right-click and hide some cells. So now we've got the side-by-side and we're just going to pick up all the non green stuff because the green stuff is the stuff we checked off. In theory. We're gonna say then we've got that, we've got the 500 up top, that needs to be picked up and that's going to be the 500. And then we've got the checks. These are outstanding checks. So we're looking for this one, the 228, I'm going to flip the sign now by putting negative of that 1359. And then I'm gonna say we've got, I'm looking at the decreases over here. So 228 negative of the 360 and then that yellow one is also one that's not green. So anything that's not green. That was that funny one that we had to split because it was the sales tax go into the state and to the UV. Remember, I don't need to go over it again. We're going to go to the 228 negative of the 3549 and we have more, don't we? Yeah, We got three more and this is gonna be gonna be equal the 228 negative of the six or the 866 and then equals to 28 and negative of the 83. And then I'm gonna copy this down a couple more. There's two more, I think copying it down. Then we've got the negative of the, the 1 fifth. Now, these 150 and the 15 or the trick are kind of tricky ones. I'm not going to pick those up because those are the ones that were in there as of 131 and they did clear. And the prior period, we put them in our reconciliation down here because our ordering needed to be basically an order of out of the date order, but we had to put the last periods. So these are actually cleared. I'm gonna make them green. They cleared in January. So I'm gonna make them green. There, we have it. So then I can delete these cells. So there are those, and let's call this, I'm going to leave a little bit of space again and call this, let's say total out, standing checks and decreases. And then make this a little bit larger and do some indentation here, we'll indent it a bit. Summing that up equals the SUM, pick up the sum of those items. I think that looks good. And then we're gonna go to the outstanding deposits out. Standing deposits. These are deposits that are outstanding in nature. Let's make this format. The cells down here for date formatting. We don't have any outstanding deposits from the prior bank rec that still hasn't cleared this time, which is typically the case because we would expect our deposits to have cleared. The only thing that hasn't cleared, it would be some Czech like this one, for example, that someone just didn't, didn't cash or for whatever reason you would expect that would be the norm. So we're going to pick up these deposits that have not yet cleared and we expect them to clear in March which we can check. But we're gonna pick these up. These are the reconciling items. And the amount then is going to be for 204, the 2060. I'll leave a little bit of space here, and this is gonna be called the total. The total outstanding deposits. Summing that up equals the ESG am, making an indentation alignment and indent. And then we're going to leave a little bit of space and we'll call this the adjusted just bake balance, which is going to be equal to the beginning balance minus the decreases. And then plus the deposits, we get to the 95259. Does that match what I had on my book side? I got to unhide some sales to find out. We're gonna do the big reveal here. We're going to HSV-2, HV to I'II, right-click and then unhide that stuff. And then we'll scroll on over and see does it match it? Does. This one, I'm gonna pull this one all the way down. So we got a side-by-side here. So at the end I could probably clean this up and delete some of these extra, extra cells, which might be good because it, but let's leave it for now. We're gonna call this the difference. This would be our check figure if there were a difference. So it looks like we're reconciling could be off by some pennies here, but we're rounding, so we're gonna keep it at that. That looks pretty good. This is our bank reconciliation. Let's do some formatting. Let's take this whole thing. And we're going to say, let's make this blue and bordered border, blue. Border blue. In our more colors. In the standard, we want that blue. The Excel is fun guy, blue. There we have it. Now, what we're gonna do next time is solve for this side. So remember that if you were to do this in accounting software, what would happen is the process of reconciling would be doing this process AS going through in essence, checking everything off to what is on the bank statement, checking everything off that could be available at that point in time, which wouldn't include the items that cleared last time, but would include the items that had not yet cleared last time and we're still outstanding as well as the current items in the current period of February. And then we would construct basically reconstruct from that the bank the bank reconciliation or the bank statement. We would in essence reconstruct the bank statement. And the purpose of doing that isn't to reconstruct the bank statement, but to find the items that do not match. And when they do not match, then the QuickBooks, we would let the QuickBooks software say, okay, please reconcile it now. And it would then generate a bank reconciliation, which would be more like the report we did to the right, but in itself where we couldn't do that yet because we're not reconciled. So if we reconciled this way, it would it would do a force adjusting entry to reconcile because we're still out of balance by that to that five hundred twenty one hundred twenty one is of course, the items on the bank statement that are not on our books that we're gonna have to add to our books. So in a software setup, we would have to add those to our books and then reconcile. Then the south, we're creating our bank statement and a book problem. Oftentimes you won't do this side of things and they'll just tell you what the differences are. Confusing a little deceiving because you're not really doing the full. You kinda see in halfway through the process. It's like, well, how would I know what those differences are? You'd have to take anti off the whole thing in order to figure those out. And then on a book problem, you would typically have two sides to the bank reconciliation. And you would then be looking at the book side and the bank side. And you would be figuring out which side had the problem on it, the book side or the bank side. If something's on the bank statement and not on our books, then most likely we have the problem unless the bank made an error, which is rare. So that means that we would say it's on our side, we have to adjust our balance because the bank is correct. If it's on our books, but not on the bank, then it's possible we made an error. It's a wrong entry or it's possible that it's an outstanding item, that's what we would expect. Outstanding checks, outstanding deposits, just temporary differences. That would be on this side of the things adjusting the bank because the bank is incorrect, not due to them making an error, but due to the fact they don't have the information yet, we do have the information. So we're going to adjust the bank balance to do the reconciliation. Then what we will do is we're gonna fix the book side of things because this is our problem. This is us not being correct, this is us not having the information that the bank had. And so we're gonna put that information into our books. Once we do, this side will basically disappear. The book balance will be adjusted to be whatever it's going to be after those two adjustments. And then this will all be all that remains from what a bank reconciliation is. What a bank reconciliation is which has taken the bank balance, the outstanding checks and deposits typically being older is and then having the adjusted book balance being the bottom line tying out to the balance sheet and the general ledger after we have made the adjustments. So that's what we'll do next time. 7. Bank Reconciliation Month Two Part 3: Excel accounting practice, problem, bank reconciliation, month to port three. Get ready because we're about to excel. We are in our Excel worksheet prior presentations, we put together the worksheet from a blank sheet now continuing to enter transactions into it, if you have access to it, There's two tabs on the envelope and example tab and a practice tab. The practice tabs starting out where we left off last time. The example tab in essence being an answer key, we're gonna stay here onto the practice tab and go all the way to the right where we've been entering the information for the bank reconciliation. We've done two months of bank reconciliation and still working on the second month of the process, we're going all the way over. Here's the first bank reconciliation. And then we did the second where we basically matched out the information on the general ledger to what is on the bank statement and that helped us to determine the items on our books which are not on the bank statement. Those being the outstanding checks and deposits that we're going to use to create the bake reconciliation. In doing so, we basically reconstructed the bank statement because the common notion would be that if it is on the bank statement, then it should be on our books unless the bank made an error. But generally we're gonna have to add it to our books. So we basically went through and tick and tied everything off in a similar fashion as you might see, an accounting software like QuickBooks type of software. And we looked at the outstanding items from the last bank reconciliation as what was the activity for the current period, those being the unclear items. We started with the same cleared beginning balance. That was the same balance in the prior bank statement, which matches our cleared balance in our book as well. Then we looked at the items that were cleared deposits and check them off whether they were opened in the prior period or whether these are actually the clear deposits or in the current period. Those were the additions to 51981. And then we looked at the decreases. And those are gonna be the checks that were either outstanding the last time that clear this time or that cleared in the current month. And we were a little bit different here because we had two items that were decreases on the bank statement, that being the 520 that we're not on our books and therefore we have a difference of 520. If you're using accounting software, then it would have to do before you actually hit the little reconcile button is to add this into the system so our Indian book balance would then match what it should be. And so then we would have this reconciliation and we would just be looking at the differences on the timing differences typically being the outstanding checks and deposits in a book type of problem you'll out, you'll often be given the information that are the differences. And then we have two sides, the book balance, This being the Indian book balance. And those changes that we need to make on our side, which typically will include items on the bank statement that we have not included that we're gonna make a journal entry for. And then the bake ending balance this time. And looking at those outstanding items, these outstanding items in a book problem often being given as simply outstanding items. But in practice, of course, we would need to take and tie what we put in our system compared to the bank to find out what those outstanding items are. These are the items that we did not check off over here when we went through this checkoff type of process. And these are the reconciling or timing difference items. Remember that these items are items that we expect The clear and following months, most likely in March. We can check that at the point in time we do the bank reconciliation. But we also it's not just to get those items to reconcile or to make sure that these have cleared. That we do the bank rec we do the bank rec to give a verification that the activity in the bank statement is correct. And if it is not just the ending balance, but the activity, that means that the other side of the accounts are correct as well. The other side's going to other areas of the accounting system given the double-entry accounting system process, including sales cycle, purchasing cycle, and so on. So now what we're going to do then, we're balanced out down here. What we're going to do is basically enter transactions for these two items, which will change the book balance to be what it should be, the adjusted book balance, it'll change it to the adjusted book balance. And then we'll be left with just this side. As in essence, what a bank reconciliation is in, is which would be created from the reconcile Lean process that people are often used to in QuickBooks type of software which you check things off over here. So let's go all the way to the left. So we can enter this into the system. We're gonna go all the way to the left to do our journal entries. And then I'm going to hide some sales, gonna do some cleanup work, some cleanup work. We're going to take sales. The skinny over here. We're gonna take the skinny and go all the way to the left. And hide right-click and hide that stuff. And then do I have room down here? I don't think I have enough room. We need to make another, another set of room here. So I'm going to put my cursor from U to X, U to X control C copy and paste that into skinny, skinny wide. Insert the copied sales. And then I'm gonna add another skinny right here before the y copying this skinny, copy the skinny. Hold on a second copy of the skinny and put that before the y and just right-click and insert the copied cells. Then I'll hide the y to u. We don't need that stuff anymore. Why you were going to hide that? Then I'm going to basically do my format painting, Home tab format paint, this whole thing to make it nice, clean, blue slate that we're going to create our masterpiece upon. There we go. We've already copied over or Indian balances to the beginning balances. So we've got a nice, nice clean worksheet to work with. So first we got we have then what do we have? I'll tell you what we have. What do we got? We've got the withdrawals of 500 this time we're going to assume that withdrawals are draws. So they took money out and they just took cash out. Now if you use the cash for the business, then you've got to check check receipts or keep receipts and whatnot because cash doesn't have a good audit trail to it. And we want the audit trail when we're looking at deductions for taxes, especially because we would like to in the event of an audit, be able to verify it if it's just money that's coming out for personal use, maybe we don't want an audit trail, but that would just take the cash and then we would we would assume that would be a draw. So we're gonna assume it to be a draw this time that withdrawal. So this is gonna be as let I'm just gonna say at the end of the month to 28. And we know the checking account is gonna go down, So that's gonna be on the bottom. Checking account is gonna be a decrease. And in the draw, it's important that the draw is not going to be is not going to be an income statement account because it's not an expense. It's not going to be something affecting the income statement should be up here in the equity section. Some people might just put it into equity. You could do that or you can create another account, an equity type account called draws. So I'm gonna select these items here. I'm going to right-click and Insert, right-click and Insert and put it right under the equity, shifting the sales down. And we'll just call this draw straws or withdraws. Whichever you prefer. Draws makes me think of it like a dual or something where they're drawing like pistols. And then we're gonna go down here. And then we're going to pick up the draws. And then we're gonna say this was for $500 because that's what the amount was on the bank statement, I believe Let's double-check it. Yes, indeed, it was my memory was like a trap, a trap made of steel. Steel trap. We're going to go down here and we're gonna go to the draws were in age 22 equals scrolling over to the 500, increasing it in the debit direction. It's kind of like a contra equity account because it has a debit balance decrease in essence, the equity, the other side is going to be going into the checking account, of course, checkout, the check-in. There it is. Let's post it to the GL as well. I'm going to have to add the draws to the GIL. That's going to be after the equity. I'm going to go to the right till we find the equity Blue accounts, equity blue, there's the equity blue. Call that equity blue. And then I'm going to select these from the skinny to the bx Control C. I'm going to paste that in the skinny right here, control, control, and then insert, copied. And then I'm gonna, I'm just gonna move this bottom one up to the top. I'm gonna take this one. I'm going to say Control X, and then just put it right there. And then we'll delete this stuff in it because we don't need the stuff and this is gonna be up top and BZ to be Z2. I'm BZ. Everybody's busy these days. Bz to call them, scrolling over, picking up the account of the direct and the date I'm gonna say His onto 28. So then we are in cell CA, California five California five freeway scrolling to the right or the left we're picking up then the draws of the 500. There it is. Let's add that to our check number. Then the check number, which is out of control. But it's still in control. It's right there. We're going to double-click on it. Got a lot of stuff going on. It's just a mess, but it's an organized mess. It's a mess That's somewhat organized. Not a contradiction. That's like we're down here, the 500, we're gonna be out of balance by the 500. Then the other side we can need to post to the checking account. That's where all the action is. That's an easy one to do. E to the z to do. This is down here on our 23228 hours. And this is going to be equal to the AM 23 because you've got to get up early in the morning when you're taken to draw out of the checking accounts. So we're at the 95279, that's going to match the 95279 on the trial balance as well. Then we're gonna do another one to 28. The other one was simply the banks a service charges that were here. So we've got to do that. $20 in the bank service charges. That's just gonna be an expense that will typically list out here as bank service charges. Other side go into the checking account up top checking out the check-in and indentation, the amount being for $20.20 on the debit, on the credit, right? $20, yes, indeed. Let's do it then. So we're going to post out the bank service charges. Bank service charges on down below we are in cell a 28, scrolling up and we're going to pick up then the $20, there's the $20 having an impact this time on the net income down below. And then we've got the checking account up top checking account double-clicking on AH, plus and picking up the $20 there too, that puts us back in balance. We had a change to the net income for the current month. What was starting at the two will actually, we had a little bit of adjustment on the let's just look at the year-to-date. The 4790 down by 24770, the cash now at the 95 to 59, Let's record this to the GL bank. Service charges is way down here in the middle of the expenses somewhere, it's after cost of goods sold. So scrolling to the right to find a bank service charges that we added last time. Bank service charges there they are. This is at 228. We're gonna say we are in CQ. Cq six equals left until we hit that wall. Boom. And then we'll pick up the bank service charges of $20, bringing the balance up to the thirty-five dollars, that thirty-five dollars should match what's on the trustee trial balance, does it does it does it the thirty-five dollars the bank service charges right there? It does. Indeed. They were looking at the 20 out of balance by 20, that up in the checking account. Scroll on over to the checking account to check it out. Down here on 228. Perfect amount of room scheduled for the checking account to pick this last item up equals scrolling up. We're picking up the $20.20 dollars. Now we're at the 952959525295. That's the amount that should be on the trial balance as well. There we go. And everything's back in balance on the geo. Let's go and see what the impact is on the bank statement. If we were to do that, scrolling all the way to the right and say, well, what does that do? What does that do to the bank statement? That means that this GL account that we wrote here is I got to add those last two components to it because this is basically a copy of the GIL. This would obviously pull over automatically if you had a database program like a QuickBooks, these last two items appearing, which would be 228, we had the 15 or $20, I think it was. And then to 28, we had the $500. Those two items now have been posted in our books. There they are. And they have cleared. They have cleared because they're on the bank statements. So we should add them here. So I'm going to add them here by saying this is going to equal to $20. And they should be a negative down here, by the way, negative and negative. Now that brings the balance to that 95259 that should match what we just saw on the trial balance and the and the general ledger. So now we can just pull this over. Pull this on over to our bank reconciliation worksheet. Now, we should tie out here. So now we have a difference of 0. We got that rounding difference because we've been working without pennies. So we've got these 61242. This is kind of like what the QuickBooks if you're working in QuickBooks. But the system, this would be the process of reconciling. We'd say, okay, yeah, the starting balances the same six hundred and two hundred four to about. And then we had we had the deposits of the 51982 that cleared. We checked them off. They cleared 51982. Cleared, yeah. And then we got the checks and other decreases are at the 11633 that cleared. Yet 11633, therefore, the ending balance must be then if I take the beginning balance plus the deposits minus the withdraws, the cleared balance of the 101591. And we're saying, yeah, one-on-one, five, not one. Great. We basically just recreated the bank statement here. And that would allow us to click the little button on accounting software to say, would you please reconcile now? When you say please reconcile now in QuickBooks, this is not what it's going to generate. This it might put it as part of the report, but this isn't really the bank reconciliation. It's going to then say what's on our books and what's the difference, which are the unchecked off items, which again include this unchecked off item that's still didn't clear from the bat last bank rec so it's still not cleared and the unclear items that are in February and that would look kind of like what we would see in our book problem. Except now we don't have this side because these two are gone now. And our beginning balance is now correct because we added everything on the bank statement to our books. So it's now at that 95259. I don't have any other adjustments to it. There are no adjustments to it ends out at 95259. And then we have the bank reconciliation, which is the 101590, the ending balance. So this is the ending balance here that we're looking at. And then we're going to adjust it by the outstanding checks. Those are the unchecked off items, outstanding deposits, the unchecked off items to get to the adjusted bank balance or the adjusted, the adjusted bank balance or the book balance. So this will match then they'll book balance over here because there were no adjustments to the book balance. And so this side is in essence the bank reconciliation. At the end of the day, at the end of the process.