How Is Math Used in Bank Reconciliation?

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Reconciling your bank statement with your checkbook is not as difficult as it appears. Simple addition and subtraction math skills are all that you need.

Definition

Reconciling a bank statement is the process of verifying the accuracy of the check register (list of entries) by comparing entries in the register with the entries in the bank statement.

Addition

Add all of your checking account deposits together. Some bank statements list the total deposits as total credits. See if your total is the same as the bank statement's total credits. Add the deposit total to your previous bank balance from your prior bank statement.

Subtraction

Add all your withdrawals and checks together, and then subtract the total from the prior balance just obtained. This should be the same as the bank statement balance.

Identification

Discrepancies in your bank balance can help identify which deposits or withdrawals are missing. A discrepancy may include a combination of missing or inaccurate entries. To determine the combination, all you need is addition and subtraction skills.

Considerations

People often forget to record interest earned or service fees. Also, because banks often charge $30 per check on overdrawn accounts, it is important to keep an accurate account. Be certain to record in your check register any direct withdrawals and fees from your account as they occur.

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