Thread: URGENT Help Needed

I can't understand what's going on with bank reconciliation.

It says Adjusted Balance= Statement Balance - Outstanding Checks + Outstanding Deposits.

Judging by the balances they're trying to compare, though, I have absolutely no idea what's going on or how to make them equal, when there is always so much more listed in the Transaction Register than the Bank Statement. Here's a question:




Edit: Sorry, I posted it in the wrong board. I meant to post it in the Urgent Homework Help board. If anyone could help me, that would be great.

Originally Posted by BlueStar

I can't understand what's going on with bank reconciliation.

It says Adjusted Balance= Statement Balance - Outstanding Checks + Outstanding Deposits.

Judging by the balances they're trying to compare, though, I have absolutely no idea what's going on or how to make them equal, when there is always so much more listed in the Transaction Register than the Bank Statement. Here's a question:




Edit: Sorry, I posted it in the wrong board. I meant to post it in the Urgent Homework Help board. If anyone could help me, that would be great.

It looks like if we work from the check registry we do this:

Ending Balance = $897.82
Subtract deposit (1/30) of $402.55 leaving $495.27
Add checks# 103 and #105 for $483,66 and $15.82, respectively leaving $994.75
Subtract service charge of $8.50 leaving $986.25 "Reconciled"

Answer: We subtracted deposit from 1/30 and service charge. So the answer would be "a" and "d"

Okay. What they're doing is still confusing though. Now I only have to subtract one item, but I subtracted the total of the bank statement and the transaction register and none of the answers seem to fit.

Originally Posted by BlueStar

Okay. What they're doing is still confusing though. Now I only have to subtract one item, but I subtracted the total of the bank statement and the transaction register and none of the answers seem to fit.

To reconcile the transaction register with the bank statement you must add the checks that the bank has not recorded.

Add these back into the transaction register since the bank has not recorded them:

ck#221 $23.00
ck#223 $430.00
ck#224 $115.50
------------------
$1571.75 + 23.00 + 430.00 + 115.50 = $2140.25
-------------------------------------------

Now subtract the deposit of $55.00, since the bank has not recorded this credit.

$2140.25 - $55.00 = $2085.25
-------------------------------------------

Finally, subtract the service charge of $15.00, since the bank has recorded this debit.

$2085.25 - $15.00 = $2070.25 Reconciled!!

The question asked "Which item should be subtracted from the transaction register......" As you can see, we subtracted the deposit of $55.00 and the service charge of $15.00 in order to reconcile the account. It looks like two answers again to me, "a" and "c". But maybe they're looking at it this way. The service charge is a bank charge. So to reconcile another way, we would add the service charge of $15.00 back into the bank statement leaving $2055.25 as the bank's balance.

Then, we do everything as we did above on the transaction register side except subtract the service charge of $15.00. This time both statements reconcile at $2085.25.