Question

6. Checking account reconciliation 

How Do You Balance Your Checkbook? 

Your roommate, Samuel, is embarrassed. He has never before had a checking account, but he finally opened one last month. He's standing in the doorway of the kitchen with his check register in one hand and his recently arrived bank statement in the other. Admitting that he doesn't know what to do next, he's asked for your help in learning how to reconcile, or balance, his checkbook. 

Being both a good friend and a student of personal finance, you've agreed to walk Samuel through the process. Moreover, knowing the value of asking and answering good questions when learning how to do something, Samuel agreed to answer your questions about the process. 

SAMUEL: Thanks for helping me with this bank statement thing. So, where do we start? 

YOU: Let's start with some preliminary questions. I'll ask and you answer, and we'll agree on some fundamentals about reconciling bank accounts. So, why is it a good idea to reconcile your bank account or balance your checkbook? 

SAMUEL: According to my personal finance book, reconciling my account will help me spot potential errors in the bank statement or my own records, and it will verify my account's actual balance as of the 

YOU: You're absolutely correct! Now, according to the experts, how frequently should a bank reconciliation be performed, and how frequently should ongoing or between-statement deposits and withdrawals be verified with the bank? , but I should verify my ongoing 

SAMUEL: That's an easy one. I remember reading that I should reconcile my bank account deposit and withdrawal transactions online every couple of days. 

YOU: That's right! Now that you've got the fundamentals under control, let's go through the actual process of balancing the checkbook. 

Now, with Samuel's latest bank statement and his check register or ledger in hand, you can examine the documents. Use the grey slider along the right-hand side of each of the following boxes to see Samuel's bank statement and check register (account ledger).

Answer 1