QuickBooks Pro Plus desktop 2022 bank reconciliation a month one checks and cash decreases. Get ready because we bookkeeping pros are moving up the hill top with QuickBooks Pro Plus desktop 2022. Here we are in our get Craig guitars practice file going through the setup process with a view drop down at the open windows list on the left hand side company dropped down homepage in the middle maximize into the gray area reports drop down company and financial taking a look at the balance sheet standard.
00:30
We’re going to customize that report change in the date range from a 101 to two just to the first month of Oh 131 to two and then go to our fonts and numbers changing the font to the size of 14. And then we’ll say okay, yes, please. And okay, we’re focusing in on the checking account up top. Now let’s be opening up our bank reconciliation, which we started last time banking dropdown, we’re going to go to the reconcile item, we had already entered our ending balance beginning balance at that 25,000.
01:06
Noting the 25,000 does not match what’s on the bank statement, we’ll see that difference in the beginning balance and how we can deal with that after right now we’re going to be focused in on doing the decrease side of the accounts. So we’re going to go back on over here, there’s the 61 241. And here’s the 61 241 on our bank statement. So we’re going to be continuing on and we’re right where we left off last time going to do the same kind of thing over here to the checks payments, or decreases as we did with the deposits.
01:38
And as we do so note that on the checks side, it can be a little bit more confusing, given the fact that that the date is usually going to be more distance. If it’s an actual check that was written, meaning we’re gonna have written it before it cleared the bank and it can take some time for it to clear the bank, even under normal conditions, given the check has to be given to someone else deposited in their bank, and then relayed on over to our bank that the transaction has taken place.
02:06
However, if it was a check, we will have the check numbers. If it wasn’t a check, and it was some kind of electronic transfer, then it might be a very quick transfer. So a date will be more relevant. In that case, we won’t have the check number in that case. So that’s that’s the takeaway, something that will not be as easy. But the electronic transfers generally also have memo information often, which includes the vendor name in it, which can make that a little bit easier to tie out as well. So just keep that in mind. On the cheque side of things.
02:36
Same process is that we’re going to be going from the bank statement, imagining this is what we got from the bank to the QuickBooks data checking off from that way, not from the books to the bank statement, although you could go back and forth, but you always want to be thinking of going to the bank statement to the books, because that’ll get less confusing to you. Because everything on the bank statement needs to be on our books. And if it’s not on our books, we need to add it unless the bank made an error, which is quite rare. And if it’s on our books, however, and it’s not on the bank statement,
03:07
that’s what we expect to happen, at least for a few transactions, because those are going to be our outstanding items, items that we wrote outstanding checks that we have in our system that we know about, that the bank does not know about, and that’s going to be a reconciling items. So we’re gonna start here with the check number 1001. For 12,000, if I go on to here, we’re gonna say there’s the 12,000, this is obviously easier to do as well if you have two screens, or if you have the bank statement actually printed out. But so there we have it, but I’m totally green here. So we’re totally green. So we don’t have any no print out or whatnot.
03:41
And it gets we got in our check mark, it’s at 12,000 101. The date in our books is one four. And the date over here is one seven, so you expect to have the bank statement date be a little bit later. And then these two, the 1000 and the 4000. Those you’ll notice are not on our books. And that’s going to be a problem, we’re going to say, Well, how am I going to reconcile without those two on our books.
04:06
And so I’m going to keep going without those, you’ll note that those two are the difference between the what the 30,000 up top and the 25,000 that we put in the books as the beginning balance because that’s what we had in our bookkeeping system. So we’ll get back to those later. Then we got check number 102 for 16,000. Check 102 for 16,000. Check, roger that checked it off, and then we’ll make that one yellow. This one’s 103 for 7000.
04:35
So 103 for 7000. Note that date 111 in our system, and 112 here 1034 7000 689 to 105. So there’s the 6892. Notice that skipped one here. So we’re on on this one. So that’s that could happen because It might not be in the exact same order because note that your bank, your bank account might be in the order that they cleared the bank. Or they might put it in the check order, but they probably got to put it in the order of the dates that it cleared the bank and the dates that they cleared, the bank might not line up to the same ordering of the dates, we wrote them,
05:18
because some people might hold on to the checks more longer than others. If you have electronic transactions, then you would expect it to line up a little bit more closely as the transactions should take place more rapidly. So we’re going to Sarah, let’s highlight that 172 106. So we’re looking 106 72 date on the 115. So that looks good 115 On the date, versus the 19. Here, making that highlighted 104 for the 37 at Big 137. Notice that one’s back up top here. So it’s a little out of order. But same one because this one we wrote on 114. And it didn’t clear looks like until 123.
06:01
I don’t know why you wouldn’t run to the bank with that one. As soon as you got it, I would think but whatever. And then we’ve got the 107 for 12,000 107 for the 12,000 on 126. And then let’s do these two at the same time, we’re going to get fancy here, try to memorize both of them 620 and 15,000, we’re going to check them off at the same time. 15,000, I forgot the other one, I failed. And the 626 20. There it is Edison and the 110. So we’ve got all of those.
06:34
And notice we skipped a couple at the bottom here. And that is to be expected, I’m going to hide the transactions that are after January. So now we’ve got all these transactions that are still in place that we have not yet checked off. We had one on the deposit side, we’ve got these items that are on our books as of January, which are not on the bank statement. Is that a problem? No, that’s not a problem, hopefully, because we’ll be able to check if those items have cleared the bank, because we would expect them to have cleared in the following month, which is going to be in February, we’re going to be doing the reconciliation sometime at the end of the month.
07:12
So we should then be able to to verify that those items have cleared in February. And if it’s just a timing difference, you might ask, Well, why am I even doing this then, because by knowing exactly what the difference is between our books and the big books, which now will be the unchecked items, when we do the bank reconciliation, that gives us a double check that all of the transactions we have done are valid or good transactions, given us a double check and internal control over the you know, pretty much the whole accounting system to some degree. Okay, so that’s gonna be it. Now we don’t have these two down here, I’m going to highlight these two.
07:47
And we highlighted all these last time, those were highlighted last time. So we can just go this one, this one, this one, and this one. So we’ve got all of that done. And so now we’re looking down here, we don’t have these two down here. And if it’s on the bank statement, and not on our books, we’re gonna have to add it to our books is the general rule unless we think they’re wrong about these items. And they’re usually not. So here we had a withdrawal that took place, that’s us taking money directly out of possibly with an ATM. And if we take money out directly with an ATM, then we should be we should be locking it down in some way.
08:27
Because we can do two things. If that were the case, we could be saying either anytime I take money out of my business from the ATM, it’s for personal use. So I can then know well, then it will be a draw. Or I can make the assumption that I’m going to, you know, tell myself what I’m going to use the cash for for a business use. And in that case, it’s a little bit more difficult because cash doesn’t have the same audit trail. So that means that we have to determine, you know, what we spent it on, apply it to the correct location if it’s going to be an expense for business.
08:59
And then we’ve got the service charges, which are going to be items that are charged by the by the bank to us, which we didn’t know about until we got the bank statement. So I’m just going to add these two items in place, I’m going to go back on over so you could open up this item on the left now you might leave and save it here or you could just kind of work outside. And then these two these items should pop up. I’m just gonna go right into the check register. Now I’m going to go company drop down, go on over to the to I’m sorry, the lists drop down chart of accounts. And let’s just double click right on the checking account and say I’m just going to add these two items.
09:34
They’re both as of the end of the month. So I’m just gonna say Oh 130 122 I’ll close the caret for now. So we have a little bit more room. There’s no account number. So I’m going to say just delete that. And the first one was a withdrawal. Now the withdraw if you’re the bookkeeper, for example, and you’re dealing with someone else like a client, and they draw money out of their account.
09:56
What you’d like to do is tell them hey, look, you know if you draw in money out directly it’d be best if you only did that when it was an actual, like a draw for you taking it out for personal use, because then I can determine where to put it. If you’re drawing out for business use, then you got to tell me what to put it in becomes a little bit more difficult. Let’s assume that’s what they did. And they just said it’s for business use, but we don’t know what exactly you spent it on. Well, then, in that case, it would be we’re going to say, All right, well, it’s going to be the drawls are 150 150.
10:30
And we’re going to put it to some kind of expense account. And again, if I don’t know what it is, then I’d have to put it into like miscellaneous expense, or something like that. Which isn’t good for an audit trail, not good to verify your expenses for taxes, and so on. So that’s why usually, on the expense side, you want the record for the expenses, because for taxes, you’d like an audit trail for the expense side of things. So we’re going to set it up, though, I’m going to put it in and next time, we’ll do it as a draw, saying it was be a draw. So it’s going to be an expense item miscellaneous expense, so I’m going to say, okay, dokay, and then just record that one out.
11:10
And so then if I open up the caret, and I go back to my bank reconciliation, we’re gonna save, we’re gonna say, there it is, there’s the 150, check, Roger, that checked it off, we’re only off by 15. Now. So we’ll close we’re gonna say 150 Here, let’s go yellow fi that. So now we got the 15 bank charges. So some kind of bank service charge happening. So let’s go back to our this is the one that you could put in place as you, you know, enter the data, like, as you start the bank reconciliation, there’s an option to put it there. But I think it’s just as easy to just put it right into the register.
11:47
And it’s easier for me to kind of check everything off and make sure I’ve got everything tied out that way, in my opinion. So I’m going to say let’s just put this in place, we can call this the bank, I won’t even put a name though, I’m just gonna say it’s a 15 decrease. And it’s something like bank service charges. So they do have that QuickBooks gave us a bank service charge, it’s usually a fairly small amount. But I like tracking, you know how much the bank is charging me.
12:10
So I want to have it there. Instead of grouping it and like miscellaneous or some other account. And so I’m going to say OK, on that one, and then go back on over to my bank reconciliation. And just check off there’s the 15 has shown up now. And now we’re in now it’s in balanced out, it’s in balance at this point, which should be a little funny, you might say, well, how in the world is it in balance, when I didn’t check off these two? Meaning, I started with a balance that was wrong. It was 25,000. And in this one have 30,000. So my beginning balance is wrong.
12:47
And I didn’t check off these two items, which I should would think I’d have to check off to be in balance, because usually the beginning balance would be right. And then I would have to check everything off in order for the ending balance to be correct, correct. That’s true. But in this case, in this case, and this is common, if and this beginning balance kind of problem, this 30,000 up top is different than what we had in the books, because of outstanding items in the prior bank reconciliation as of December in the prior accounting system. So so there’s a $5,000 difference.
13:25
And of course, that 5000 difference is represented down here, by the two items that we’re going to say make up the outstanding checks from the prior time period that aren’t in the system. So you could then note that and you could just reconcile right now and say, Okay, well, my beginning balance doesn’t tie out. But that’s because of those outstanding checks that aren’t in the system. And I’m still reconciling, so everything would kind of be good to go forward from here. However, if you gave the bank reconciliation to somebody else, and told them that they might be a little confused, because your beginning balance would not tie out.
14:03
So what we would like to do instead really is is adjust the beginning balance and enter these two, these two items into our system, which we’ll do next time. And so we’ll enter these two in the system, but we’ll do so as of the prior period, because that’s when we actually wrote those checks before the starting point of this, this current reconciliation.
14:26
And then and then we’ll net that out to the to the 30,000 that is here, or the 25,000 here so that we can see the detail of what is happening with that reconciliation process. So we’re not quite done with this one yet. I’m going to just say leave for now. And we’ll come back and do that. Do that next part next time.