Page 26 - CalcBus_Flipbook

3-16 Everything Decimals CH 3]

Check Register: A
check register, is a RE CORD A L L CH A R GE S OR CRE D I T S T H A T A F F E CT YOU R A CCOUN T
journal used to
record all of the
checks, cash
payments, and
outlays of cash
during an
accounting period. A
check register
usually has columns
to include the dates,
check
number, payee,
account names
used, and
the credits and
debits associated
with the transaction.
Figure 3.9 A Personal Check Register

available and is added to the balance to obtain a new balance. The balance is a running
balance and the arithmetic performed, addition and subtraction must be accurate to always
maintain an accurate balance for the account.

Bank Statement and Reconciliation

Banking institutions send to their depositors a monthly bank statement of income and
expenses that reflect the transactions of the account holder as they have cleared the bank.
The bank statement itemizes for a specific date all transactions from the date of the last
bank statement and lists the activity in the bank account during the recent month as well
as the balance in the bank account that the bank holds. The bank statement does not show
the balance in the check register.
The bank statement shows the balance at the beginning of the statement period and
the end of the statement period, and lists the deposits made and the amount of each check
charged to the account and any other deductions (bank charges) and additions (interest
earned) to the account. The bank statement should be accurate for the time period it covers
from the bank’s side. It probably will not match the balances in the check register as it does
not contain deposits or checks written or withdrawals from your accounts after the date on
the bank statement as the check register should.
In this age of computers and WEB access, many people can write checks absent the
actual paper written for a store, or bill being paid. This occurs regularly when shopping via
the internet with such companies as Amazon.com and J.C. Penney, or paying common
recurring bills such as the electric bill or gas utility bill, or an education loan, real estate
mortgage or auto purchase. With recurring payments the payee sets up a recurring transfer
of funds as of a specific date such as with auto financing and education loans. Sometimes
the payee allows for an automatic withdrawal of funds on a specific date as with mortgage
payments.
The bank statement will not list checks or charges that are uncleared through the bank
or those checks written after the date of the bank statement, a sort of lag period. Thus it is
necessary to reconcile the check register to the bank statement.
Reconciling a bank statement involves comparing the bank's records of account activity
with your own records of activity for the same account and balancing each to the same
value. Reconciling the bank statement needs to occur each month when the bank statement
is received and will cause an update of the check register with the bank statement so that
both have a common balance.

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