 then why don't we just put that into like miscellaneous as well or something because it's a small in material amount. Personally, most of the people I've seen, I kind of like to see how much the bank's taken out, even if it's small, just to make sure it is small. But that's a choice that the bookkeeper is going to make. In this case, we have a separate account, bank service charge, it's an expense, expenses that debit balances, we're going to make it go up by doing the same thing to it, which in this case would be a debit. So we have it going from zero up by the two here to two dollars. That's going to bring down the net income, the expense goes up, which brings down net income. And then the cash is the other side of the entries being recorded here. That's what's making the 82, the 80 plus the two. And so the cash has a debit balance, it's going to go down by the credit for the two dollars in that case. And now we've recorded these two transactions. So now we can say, okay, those now I can see. If we look at this same transaction in terms of our general ledger now, note that this is where we were at on our trial balance before these two transactions. We should also reflect this, this would be reflected on the general ledger as well, meaning in our GL we have as of the 28th, there's that $80 that's going to come bring it down represented by this journal entry. And here's the two dollars bringing it down represented by this journal entry. So that would also, of course, be reflected on our GL so that our new balance in the GL would be 16 to 56. So this is where we stand now. This is still where the bank statement is. So we're still not in balance, even though we've adjusted for these two amounts. What we have not adjusted for yet is, of course, these that were outstanding. So that's what we'll have to do next time. So now you'll recall that we tick and tide all this off. We've now tick and tide these off and we're left with these items, these three items. So these two, they're on our books, but they're not on the bank statement. And we wrote them as of the end of the month. So it's expected we would assume that we wrote them and they just haven't cleared yet. So that's going to be on the bank reconciliation. So the bank reconciliation should for the most part be these timing differences, meaning this is what we started with, or this is what is on the bank statement. And then we're going to say what should be on the bank statement that is not due to timing differences. Well, this 130 plus the 110 are checks that we wrote and they're not included in the ending balance on the bank statement. And they should be because it's just a timing difference. They're already out. The bank just hasn't got to them yet in order to record them. Therefore we're going to reduce the balance by that. And what that'll do is it'll bring the balance down to 1556. And of course we're still not quite there yet because our balance on the books is 16256 at this time. What's the difference? It's the deposit we haven't yet recorded, I would hope. So let's do that now. So now we've found these two. Again, these two are done, the only outstanding item being this now at this time. So we found these. So that of course will be recorded here. So now we have the outstanding deposit. Same idea. We deposited it as of the last day of the month. Therefore the bank reconciliation for the month does not yet have it. We could verify that it has passed and cleared in March, but we just want to record as of this time that that's the difference. So if we take the 15 minus the outstanding checks plus the outstanding deposit, we come up to 16256, which is now adjusted to what we have in our books. So what's the purpose of this? Now we can say this is what's on our books and it ties out exactly to what's on the bank statement so we can double verify our entries because we know exactly what the difference is. The difference is exactly what we expect it to be. It's the timing differences. And if that's the case, then we've double checked our work and we've double checked it with a very strong source being the bank. And if our cash is in reconciliation, we have a much better verification and we feel a lot more comfortable that our transactions are correct. So whether you're a large business or a small business, if you get the cash reconciled that is a huge check in order to verify the books. So obviously we can see that this ties out here. It ties out to the general ledger and it ties out to our entity balance on the trial balance. All right, so we are now able to describe what a bank reconciliation is, perform a bank reconciliation, make a needed adjustments to our books in the reconciliation process and record adjustments.