 QuickBooks Online 2022, bank reconciliation month number two, checks and account decreases. Get ready because it's go time with QuickBooks Online 2022. Here we are in our get great guitars practice file that we set up with a 30 day free trial holding down control. Scroll it up a bit to get to the 1 to 5% currently in the home page otherwise known as the get things done page. It's something you can do by going to the cog up top switch to the accounting view down below. We will be toggling back and forth between the two views either here or by jumping over to the sample company file currently in the accounting view jumping back to the get great guitars opening up a couple of reports that we're going to put or tabs that we're going to put reports in by right clicking on the tab up top and duplicating that tab back to the tab to the left right clicking on it again duplicating it again as those items are thinking let's see where the reports are located like in the accounting view jumping over to the sample company they're right there that's where the home of the reports are in the accounting view but in the business view in the second tab the home was moved due to due to intimate domain something I don't know went into the business overview here houses I'm going to close up the hamburger we're going to open up the balance sheet report let's go into the big balance sheet range change up top from 010122 to 022822 run at and then I'm going to go to the income statement back down to the business overview reports closing up the hamburger let's open up the P to the L the profit and the loss the income and statement range change 010122 to 02282822 and I'm going to then change that to the months this time so we can see the side by side and then run it and so now we've got Jan fab tote Jan fab tote and we're focusing in on the fab but here we're going to the balance sheet again and we're doing the reconciliation for month two so we have the end date February 28 reconciling our balance currently in the cash account here of course to what is on the bank statement we started the reconciliation last time so we will presume to resume this time by going to the tab to the left and we're going to go down to the bookkeeping area if you were in the accounting view by the way it would be in the accounting tab down below accounting tab and then reconciled up top and so here it's in the reconciled I'm going to close the handbook and we're going to resume resuming the process I had my coffee little bit of lunch and now I'm going to resume my reconciliation you'll recall last time we've got the ending statement balance ending statement balance 101 590 05 we've got then the beginning balance ties out no beginning balance problem because we're in a month to 61 241 85 looks great movie be to the end be to the end be in minus zero payments and so there we have the deposits that we put in place 51 780 120 that ties out right doesn't it let's go back on over where am I right there we've got the 51 981 20 let's make that I'm jumping in from the future to let you know that if you're sitting there thinking hey that's not the same number that we just looked at you are correct it's going to be something that we're going to fix towards the end of the bank reconciliation process if you want to see what the difference is now or what the problem is we ticked off the wrong amount down below ticking off the 200 instead of the 400 that was coming from the prior presentation tying out to this 400 we click the wrong amount we will realize that in the bank reconciliation process at or towards the end of this presentation so you can either adjust it now if you would like to do so meaning you can tick off the correct one or you can continue with us and fix it as we go through this epic saga of month two February bank reconciliation let's mark that one off as having been reconciled and so we have a difference of the 11 433 once this difference is down to zero then we have a cleared balance which will match the statement balance that does not match what is on our our balance sheet the cleared balance does not but the unchecked off items help us then to figure out what the reconciliating items outstanding checks and deposits will be we're focusing in on the outflows now so I'm going to filter that with the payments I'm going to close the carrot and we're ticking and tying so let's go back on over to our statement remember that when you're looking at outflows you have the minimum amount of information they will have is the date and they will have the amount and then if it was a check that you wrote you're going to have to check number so if you actually are writing checks then the date will become less relevant because it's quite possible that it's going to take a lot longer for the check to clear so we would expect then we as the bookkeeper to have entered these items a fairly good time frame before they actually cleared the bank that's why the check numbers are going to be more important in that instance if on the other hand we're doing electronic transfers we will not have the check numbers but the date will be more relevant given the fact that the electronic transfer should be pretty close to when we entered it in our system to when it cleared if not basically the same date depending on whether we're dependent on the transfer or not to record you know our transactions and if it was an electronic transfer we might have some more information such as the vendor information as well which would be kind of in a memo format that could help us to take and tie things off to so let's do this if I if I go back on over here also just remember that this is an area that you might want to want to adjust your view to kind of see it by check number if you're using check number for example but date formatting it by date organization is probably most common I would I would assume that's what I would use most common to check and tie these items off now we're always going to be going from the bank statement to the books because if it's on the bank statement it has to be on our books unless there's an error on the bank statement which is not generally the case if it's on our books and not on the bank statement that could quite well be okay or something that's simply an outstanding check therefore ticking and tying off you want to go from the bank statement to the books typically so here's the 51 to 35 to 7 or 7 to 70 so if I go back on over and take a look at this now this one's a little tricky you can see the check number we've got that to check number that's that payroll check that we basically said we're gonna adjust it so I had to adjust that to basically reconcile in to the bank reconciliation so we processed payroll and then I said hey we're gonna we're gonna add this other $60 with the same check number because I've already made the bank statements and I want this to tie into the bank reconciliation this is why we did that adjustment just for the practice problem purposes so in other words checking these two off 60 plus the 351270 adds up to that 357 to 70 for check number 1012 going back on over 357 to 70 so that one's a little bit of a little bit of a twist but we're gonna check that one off done okay next one 410 410 on 10 is 1010s the number also note that we are we're checking these items off which were outstanding items in the prior period so here's that 410 we wrote these ones in the month of January they were cleared they were not cleared transactions but they were included in our book balance because we wrote them in January there's a timing difference but they're clearing in February so in other words if I take a look at the bank statement or the bank reconciliation for the month of January of last month's bank reconciliation the reconciling items down here are going to include these unclear checks which that that amount of the 410 was it here it is I went too far down the unclear checks and payments so there's the 410 so we so it was on the prior years bank statement but these are the these are the unclear items as of the end of January which we would expect the majority of them to be clearing in the month of February which they looks to be our thus far these two have at least checking that one off and then we've got the 185640 so let's do that one so we've got the 185640 over here 185640 check number 1013 so check number 1013 that is good let's take that one off then we've got the 200 1015 so let's go back on over we've got the 200 on and that was 1015 at the check number so there is that one so let's check it off ticking it off we've got the 130 1014 so the 130 1014 we'll take it off 1014 that looks good and we're going to go back on over and say let's tick that one off we've got the 135873 1016 so I'll go back on over say 101618573 ticking it off and then we're gonna say alright that one ticking it off and so then we've got the 180 1018 1018 180 tick it off notice it's not exactly in the same order that could be typical especially with check numbers depending on how they order the items because they could be clearing on different dates of course and then we're gonna go back on over and say let's make that one yellow-fied and then 1021 46877 so 1021 is down here 46877 and so we've got some unclear items down here which is what to be expected and then we're gonna say we've got the 1023 185640 so let's go back on over 1023 185640 checking it off and then getting close we're getting close no cigar yet I want that cigar I don't smoke I'm not gonna smoke it but I still 1024 1050 here we go 1024 1080 there we have it okay and there there let's mark it off okay so now we these last two the 500 into 20 we're not gonna find those because that's the withdrawal and the bank charges so we're gonna have to add those most likely let's go back over see where we stand now if I go up top we're off by 320 that seems correct because that would add up to no it's not correct hold on a second hold on a second now I missed something on the deposit side it looks like because I'm going through here and saying okay my deposit should be at the 5178120 and if I go back on over to here I'm at the 5198120 51981 versus the 517 it's off by 200 I'm gonna go back to the deposit side of things and let's see what happened here so I'm looking here I'm gonna say is it that 200 right there yeah I think I checked off another 200 somewhere along the way if I go back on over that 200 if I uncheck that is gonna be off by 120 now off by 120 because that 200 isn't on my deposits there's a 400 here it should be the 400 I clicked off the 200 instead of the 400 so I'm gonna go back on over and say I should have clicked off the 400 and that would get us to the 5198120 the 5198120 on the deposits so there's the 5198120 so that's the reconciliation in work right there that it there go and so now we're off by 520 which seems reasonable because if I go back on over here that's gonna be these two items that I need to add okay so now so now I need to add these two items so let's do that I'm gonna say this is gonna be a withdrawal again and the bank service charge so let's go let's go back on over and say okay everything looks good now I'm just gonna add those two and I should be back in business and I like being in business business is good for me so I'm gonna then let's say save it for later and add those into our check reg so you could do that here but I'm just gonna go back into the to the bookkeeping area and then go into the the chart of accounts which if you were in the accounting view by the way would be under the accounting and then chart of accounts up top and then I'm gonna close up the hamburger and I'm gonna go into the checking account and let's add these I'm just gonna add them as expense items expense items and I'm gonna say they both happened at the end of the month 022822 I'm gonna say and then I could I'm not gonna put the payee I could put the bank here as the payee but I'm just gonna call it here this is gonna be a draw now this one I'm gonna say this one this time we've got this withdrawal remember last time we said we had a withdrawal but we're gonna assume it was still for some kind of business expense but what you would like to do whether it be you or or if you're doing bookkeeping for somebody else you would like to have the system that if you take cash out then we're assuming that's gonna be for personal use that you're taking a draw out of the business if it was and if it was a corporation you know it'd be like a dividend but if it's a sole proprietorship or a partnership we would like to assume that's gonna be some kind of draw because if it's an expense I'm not gonna have the expense account if it's an expense in a legitimate business expense you would like to pay it with something that has an audit trail so we can easily record it because we want to record it and have the audit trail because you might need it to to to backup or support your tax deductions for example so that's why you know you want the audit trail for that again if you had something that was a business expense where you have a legitimate reason to use cash for example you think the recipient would like the cash better as like a tip or something like that I don't know then cash could be king in some situations and it could go a longer way but if it's if it's no difference to the person you're paying then it would be nice to use some kind of electronic transfer that we could track because the deductions are good for taxes and we want to be able to verify them so here we're gonna assume it's a draw this time this time we're gonna assume it's a draw for personal use and I'm gonna go back on over here so the owners taking it out 500 now you could put the draw into an equity account of just the equity account where you might create another account called withdrawals so and I think they made another account for withdrawals withdrawals what do they call it they called it there it is it's owner draws owner draws so I'll pick that one up and that's the one that's the one we're gonna take that one so I'm gonna say save it it should then show up on the bank rec and then the other ones for the bank service charges I'm gonna say bank charges and that was for how much was that for $20 $20 20 and that's gonna be in the bank service charges or something like that bank fees service charges that's what they have here so I'll put that one there that looks good and let's save it so I'm gonna save it and then it says so it's giving me an error but I just re-entered it again and let me it let me enter it so we put it into so it should work now so I'm gonna go back on over I'm gonna go back into my my handbook and then go down to the bookkeeping again and resume reconciliation we're gonna go down to reconcile I would presume to resume with the reconciliation at this point if it's all the same to you let's go to the payment side of things and we're gonna go down and say now we should have these two things there they are ticking them off ticked them off don't tick them off don't tick them off whatever you do I'm ticking them off man I'm ticking them off I don't care I'm crazy so I'm gonna say that's gonna be we're gonna tick those off to everything's ticked off now so now we should tie out to that 11 633 11 633 so so up top 11 633 ties out looks good we're back to we're in zero on the balancing side of things that looks good so we're about ready to reconcile we're not gonna do it yet though because we want to look at the report next time so we're not hitting the green button yet but let's just kind of think about what we got thus far we can tie everything out we've got the cleared balance here that matches or the statement balance matches the cleared balance because we have the beginning balance the beginning balance matched out now our additions and subtractions we tick them off and they all tie out to take this one off they all tie out to and therefore our ending balance or clear balance will tie out and that means these two are tying out making it a zero difference but this cleared balance this is not the bank reconciliation because this cleared balance isn't what's represented on our books that's not what's represented here on our books because our books isn't what has cleared or not and includes everything we have entered including the unclear items so the unclear items the things that we have not ticked off down here are the reconciling items the things that had not yet cleared last time that have cleared this time that's the beginning cutoff and not all of them have you'll note that this one we wrote in January that hadn't cleared in February that doesn't mean it's it's still not good or that it won't clear in the future but the likelihood of a clearing is is greater given the fact that it's been quite some time since or longer period of time since it has cleared or it has been written and then the ending side these ones down here are the ending components that we put in closer to the cutoff of our bank rec 228 which have not yet cleared we would expect them to clear in March we can check them to see if they have cleared in March if they have that's okay it's just a timing difference then and when we finally make the bank reconciliation which we will do next time then those will be the reconciling items that will take the difference between the clear balance which is now the same thing as the statement balance all the stuff that we checked off all the stuff that mirrors and is exactly the same that is on the bank statement compared to what's on the books which is this item on the balance sheet as of 228 22 so that's what we will do next time we'll hit that green button we're going to hit that green button next time don't do it yet you got you have to wait till we do it next time and it will be great