3.6 Balancing and Reconciling

Notes

Reconciling means comparing your own records with the bank statement to catch errors.

• Start with the statement balance.
• Add deposits in transit (made but not yet shown).
• Subtract outstanding checks and payments (written but not yet cleared).
• The result should equal your own record. Differences may signal a mistake, a missed fee or fraud.
• Example: statement balance $800, deposit in transit $200, outstanding checks $100 and $50. Adjusted balance $= 800 + 200 - 100 - 50 = 850$, so $850.