 Hello, in this presentation we will talk about the adjusting entries related to the bank reconciliation process for January into our bookkeeping problem in Excel, keeping in mind how this same information might be input into accounting software such as QuickBooks. Last time we entered the information for a bank reconciliation. Now we're going to take a look at those adjustments that would be entered, oftentimes being revealed through the bank reconciliation process. We will first take a quick look at QuickBooks and then move into Excel and enter the information there. Within QuickBooks, once we did the bank reconciliation, we had two items that were on the bank statement, not on our books. Within QuickBooks, we typically would go in and make that adjustment, meaning we would adjust the cash account here through the cash register, meaning we're just going to enter the $15, which was the difference, and charge it to the bank service charge, reducing the checking account and posting the other side to the bank statement. And then we can go into the bank reconciliation and just check that off. So we're actually entering these adjustments as we go. We'll take a scroll all the way to the right in order to see where the bank reconciliation process is. So we're just taking a scroll all the way to the right to get to the bank reconciliation process, scrolling to the right. Here is our bank statement and our bank reconciliation on columns DW through EK. Last time, what we did was match out the bank statement and our books and reconcile the items. And we typically have two reconciling items when we think about a book problem. And that's going to be the bank reconciliation consisting of the bank balance, starting with the beginning balance and entering the adjustments in terms of outstanding checks and deposits. In this case, to get to our adjusting bank balance, and then our book balance, and that's going to have the adjustments to the book balance to get to our ending book balance. And of course, those things are the same. Now we're going to make the adjustments and the adjustments need to be made to these book balance side, meaning we need to make, of course, this number actually be on our books, the correct number. So we're going to change this number to this number by entering adjusting entries related to these items. To do that, we're going to enter a journal entry. Now there's a problem here because if we enter the journal entry, as of January, it could throw off or it will throw off our beginning balances. And typically that's what happens a lot of times when we do a bank reconciliation after the month has closed. And this is the issue with the closing process and something that we need to be aware of no matter what software we're going to be using. If we go back in and adjust things into the prior date, the software may allow us to do that. QuickBooks will allow us to do that. However, if we had already generated financial statements, we'll see that the beginning balances will change if we do that. We're going to do it that way just to see how that automation process happens and see what the problems can be. So note we have this adjustment here. I'm not going to make the adjustment in this month's journal entry, as I probably should. We're actually going to go back to the prior month and enter this information as of the date that this happened, meaning this withdrawal happened sometime in January. We'll go back in January and record the journal entry related to the withdrawal. In doing so, it's going to it's going to change the retained earnings portion. So let's check that out. Let's see that now. We are going to go to the trial balance for the original trial balance here in January into the journal entry. Thinking about the journal entry now, we're going to say it's a withdrawal. We're going to say that cash went down clearly because we're working with the checking account. And the other side of it, we don't really know what the withdrawal was for. We're going to put it into miscellaneous expense. So we're going to go back to the original trial balance over here. First tab. And we're going to scroll to the right till we see our journal entries. And we're going to put the journal entry in there as of 131. So I'm in U8. We're in cell U8. The date is 131. And we're going to say the checking account is decreasing. So here's the checking account. We're going to make it go down by doing the opposite thing to it, which is a credit. So we'll copy that. We're going to put that on the bottom of the date, right click and paste 123. And I believe the amount was $80. So that's going to be a credit for $80. And then we'll debit something also for $80. Once again, we don't know exactly what we purchased because we pulled money out. We don't know what it was for. If it was a draw, personal use, we'd put it here. If it was for business use and we don't know exactly what it for, we're going to put it into, in this case, miscellaneous expense. So we'll copy the miscellaneous expense. And we'll scroll back up. And that's going to be the debit, right click on V8 and paste 123. I'm going to format this just a bit and indent it. Now I'm going to make this whole journal entry yellow because it happened after we closed out the date and just meant just to highlight that fact, because that could cause this problem. We will now post this journal entry to the general ledger. In order to do that, we're going to freeze the pain. So we're going to scroll up top. We're an AJ1. We're going to go to the view tab or in the view tab. We're going to go into the windows group and freeze pains and then freeze the pains. Then we're going to record this first account. Here's the miscellaneous expense. If we scroll back down, it's in the expense area. We have assets, liabilities, equity, then expenses. Here's the miscellaneous expense. We're going to go to the right until we find that. So we have the assets first. We then have the liabilities. We have the expenses. We're looking for miscellaneous. Here it is. It's way over in BO 36. So we're in BO 36. We're going to select equal in BO 36. We're going to scroll up and then we're going to select that 80. Let's do that now. We are in BO 36. We're selecting equal. We're scrolling up just a bit and we are pointing to that 80 and enter. So there we have that. It's going to increase our balance in the expense by 80. We're going to scroll back to the financial statements to see where that information is. And there it is. We're out of balance by 80. There's the 80 on the trial balance and it's