| A bank statement reconciliation or "bank
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| | WHERE THEY AREN'T. Deduct the amounts of
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| rec" is an important step in maintaining
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| | the four checks from the balance on the
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| the accuracy of your financial records.
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| | bank statement. (Occasionally, one or
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| When a bank rec is getting you down, it
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| | more checks written in previous months
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| might help to recall this simple rule:
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| | are among the checks not yet clearing the
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| PUT IT WHERE IT ISN'T.
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| | bank account.)
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| Here are three unrelated items to
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| | Each of the items that you need to put
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| illustrate this easy-to-remember rule:
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| | into your accounting records will involve
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| Item 1. The bank statement shows a
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| | two accounts because of double-entry
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| maintenance fee of $6.00. Since this
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| | accounting. Item 1 will involve a cash
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| bank fee is shown on the bank statement,
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| | account and an expense account. In
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| you need to PUT IT WHERE IT ISN'T. This
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| | accounting terms, this means a credit to
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| means you will need to subtract $6.00
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| | the account Cash for $6.00 and a debit to
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| from the cash balance shown in your
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| | the account Bank Fees Expense for $6.00.
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| records.
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| | (No entry was required for Item 2 or Item
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| Item 2. Your records indicate that $150
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| | 3, since these items are already in your
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| was deposited near the end of the period
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| | records.)
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| indicated on the bank statement. However,
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| | After adjusting the balance on the bank
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| the deposit is not shown on the bank
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| | statement and the balance in your
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| statement. After confirming that the bank
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| | records, the two adjusted balances should
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| has received that deposit, PUT IT WHERE
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| | agree. If the adjusted balances do not
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| IT ISN'T. You need to add $150.00 to the
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| | agree, you need to compare every item in
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| balance shown on the bank statement.
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| | your records and on the bank statement.
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| Item 3. Of the many checks written, four
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| | It is possible that you or the bank may
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| have not yet cleared the bank. Since the
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| | have entered an amount incorrectly. Also
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| four checks are in your records, but are
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| | recheck your math.
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| not yet on any bank statement, PUT THEM
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