Checking Cheques

Checking Cheques

Writing Checks may be convenient but also risky.

     Sooner or later we will be dealing with and using. checks. Especially, those who plan to start their own business. When that happens, you’ll have to keep a close eye on the processes. While the bank can give you a record, statement of your accounts, you can’t be too sure, so you’ll have to have your own record. This is to make sure that you can detect any discrepancies in the payments you make and that the right amount goes to the intended receiver. 

   We’re going to be discussing Bank Reconciliation. So what is Bank Reconciliation?

 It is the process of bringing the bank's monthly report for each depositor showing deposits made, check written, cancelled checks, and service charges.

Once you’ve confirmed that your check book balance and the bank statement balance is in agreement with each other, that will be the Reconciliation Statement.

                You didn’t quite get that huh? Or maybe you did, but in case you didn’t, here’s another definition: It is the process that explains the differences between the bank statement of your accounts and your own ledger or check stub. You get your check stub along with your check book.

Sample of a check and a check stub:

Here are the possible causes of the difference in your balances:

• Outstanding Checks- checks issued but not yet presented to the bank for payment.
• Deposits in Transit- late deposits not included in the bank statement
• Cancelled Checks- checks that have been paid by the bank
• Service Charges
• Errors in the Check Stub Entries

For first timers here’s how you fill out your check:

        I encounter this problem when I’m tasked to write a check for my mother. This may be your problem too. So here are samples on how to write numbers into words:

58= fifty-eight

677= six hundred and seventy-seven

8, 900= eight thousand nine hundred

        In writing a check you can disregard the hyphen and the word ‘and’. You should also remember to add the word ‘only’ at the end of the amount.

There are instances when the amount is not exact, and you’ll have to write it with centavos.

For example:

₱9,765.50.

 PESOS nine thousand seven hundred sixty five 50/100 only

The same works for cents. Here are more examples:

http://www.mathatube.com/place-value-writ-numbers-largerhtml.html

Here's a sample problem on how to do a Reconciliation Statement:

When Mr. Erwin Garcia received his bank statement, he had a balance of P3,842.30. Hischeckbook balance was P3,288.40. He found out the checks 14 and 21 were not yet cashed withamounts of P1,000 and P557.30 respectively. His deposit of P500 at the end of the month was late to be included in the bank statement. Upon inspecting his checkbook, he noted that P5.20 was deducted by the bank as a service charge. An error was made when he issued a check for P1,002.40 which he deducted asP1,004.20. The cancelled check of P500 was not deducted either from the checkbook balance.

Erwin Garcia

Reconciliation Statement

March 30, 2002

Checkbook balance             P3,288.40      Bank Statement balance              P3,842.30

Add: Error                               1.80      Add: Deposit in transit                    500.00

                                    3,290.20                                               P4,342.30

Less                                                  Less: Outstanding checks

Service charge                          5.20             #14          P1,000.00

Cancelled check                     500.00             #21               557.30     1,557.30

Adjusted Checkbook balance   P2,785.00      Adjusted balance                         P2,785.00

Information on this post is from discussions provided by our professor.