Balancing checking account with bank statement
Maf. King
maf at chilwell.net
Mon Apr 18 11:24:46 EDT 2011
On Monday 18 April 2011 13:48:44 Diann wrote:
> Thank you for responding. No, the ending balance on the BANK statement is
> not the same as the RECONCILED balance on the checkbook ledger. The bank
> does not have any information with regard to "uncleared" checks and
> deposits. The bank statement only carries forward deposits and checks
> which have cleared. In reconciling a Bank statement with a checkbook
> ledger, it has always been my experience, that the Ending balance on the
> BANK statements is the BEGINNING Balance on the RECONCILIATION of
> bookkeeping.
>
Hi Diann,
I have to disagree with you. Reconciling is making sure that you -agree- with
what the bank says has happened.
The balance in the GC register may never be in sync with the bank's idea of
the account's balance, but the RECONCILED balance should always agree at the
end of a reconcile.
Think of it this way:
You open the bank account, there is a zero balance.
You do some transactions (doens't matter for now if some haven't cleared when)
the bank send you a statement. Opening balance = 0, closing balance = X.
You check through that statement, and see that you were expecting a balance of
Y, but that is because the final 3 checks haven't cleared yet. You can see
why the bank thinks that the balance is X, but you & gnucash know more than
the bank. You can agree on a balance of X. it makes sense. the bank haven't
made a mistake and processed some check twice. (Yay!)
You do some more transactions, the bank sends you another statement. This
time, the last thing the bank knew was that your balance was X, so their
opening balance shows as X. the closing balance is now Z. your statement
may _never_ show a balance of Y, depending on the order that things clear.
But you should still be able to "tick off" the things that the bank know about
and be able to agree that Z is a sensible number.
does that help?
Maf.
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