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Glossary
Balancing Andrew Anakoa's Checking Account

It is very important to know that the bank has recorded account transactions accurately. It's also important to make sure that you recorded your transactions correctly.

When people have bank accounts, they receive bank statements every month or quarter via mail and/or the bank provides account information online. The statement lists all transactions made during a given period and allows account holders to determine if their records match the bank records.

Now that Andrew has put his bank account register in order, he needs to check his record keeping and also the records that his bank has kept. The first step in balancing an account is to put a checkmark by all checks that have cleared and all deposits that have been credited to the account.

Directions: Read the instructions, then use Andrew's bank statement and bank account register below to balance Andrew's account.

Step 1: Compare the items on the bank statement to the bank account register. The first item listed on the bank statement is a deposit on May 1. Find that item on the check register and put a check next to that item. Continue to place checkmarks in the bank account register by items listed on the bank statement until reaching the bottom of the bank statement.

Note: It is important to place a checkmark next to the item on the bank statement, too. We will do that step for you.

Step 2: When you have checked off each statement transaction in the register, enter the ending balance shown on the bank statement in the box on the bank statement worksheet.

Step 3: If there are checks, ATM withdrawals, debit card transaction or fee amounts that do not have a checkmark by them, enter them in the "Items Outstanding" area of the bank statement worksheet. Place a description of the transaction on the lines to the left and the amount of the transaction in the box on the right.

Step 4: Calculate the total of the outstanding items listed.

Step 5: Subtract these items from the ending balance on the worksheet, and enter the number in the "Total Balance" box on the bank statement worksheet.

When you have completed these steps, click the Submit button to check your answers. To get started, click the bank account register link on the bank statement.

Bank Statement
Andrew Anakoa
1234 Kingsway
Our Town, USA 23456
Million Dollar Bank
100 Dollar Lane
Our Town, USA 23456
Statement Period:
5/01/XX-5/31/XX
Account Number: 1234567890
Date Item Withdrawal Amount Deposit Amount Balance
1-May Opening balance/deposit     $155.76
2-May ATM withdrawal $40.00   $115.76
5-May Debit card $47.30   $68.46
16-May Deposit   $128.30 $196.76
17-May Online $95.00   $101.76
17-May Online $45.00   $56.76
25-May Check #96 $20.00   $36.76
31-May Deposit   $155.76 $192.52
31-May ATM $60.00   $132.52
31-May Service charge $1.50   $131.02
31-May ENDING BALANCE $131.02
Check # Amount      
#96 $20.00      
In your bank account register, mark with a check all checks paid, ATM and debit withdrawals made and certified, and deposits credited.
Enter the ending balance shown on the bank statement $
Add + (deposit(s) that do not appear on the statement for this period) $0.00
   
   
TOTAL $131.02
Enter items Outstanding: (withdrawals that have been entered in the bank account register, but do not appear on this statement.)  
$
$
$
$
   
   
TOTAL ITEMS OUTSTANDING (Popup Calculator) $
Subtract total items outstanding from the amount listed on the TOTAL line above and record new amount on TOTAL BALANCE line.  
TOTAL BALANCE
This amount should equal the balance in your bank account register. If it does not, then your account does not balance, and there is an error.
$
The total balance should match the amount shown as the balance in the bank account register. Does it match?
Type Your Response Here
Correct Response:
 

If the statement balance and the bank account register balance do not match, you have made an error. It could be a small error — for example, entering $18.67 when the debit was actually $19.67. It could also be that you failed to enter a debit or ATM withdrawal or service fee in your bank account register. Or, it could be that you entered a credit as a debit, or vice versa. And, there is always the possibility that the bank has made an error.

Discussion Board Topic: Thinking about Checking and Savings Accounts

Answer the following questions about your checking and savings accounts.

  • What are some of the advantages of having a checking or savings account?
  • What are some disadvantages of using check-cashing services?
  • Why is it important to maintain account records and keep track of bank account balances?

Go to the discussion board and answer the above questions.