 Started so it says reconcile like a pro get your books and your bank statement to agree So you open the bank statement match your books to the statement success. All right, let's get it done So this was where we would choose the account. We're going to be choosing the checking account now Here's the problem the beginning balance here doesn't even have anything in it. It's at zero at this point in time Whereas over here We have a beginning balance of the 30,000 that's going to cause us a problem We can kind of work around that though. So let's continue with that and say, okay I'm just going to deal with that hold on a second the ending balance is 6124 185 so 6124 1.85 and by the way 6128 1 if you mess this up you can still change it Afterwards Once you're in there if I go into this this is going to be as of the cutoff date, which is on the bank statement 131 so as of the ending date of the bank statement Here and then we're going to say down here enter the service charges or interest earned This is kind of a remnant of the old bank reconciliation before bank feeds Because oftentimes what would happen is if we did a full service accounting system We would be entering oftentimes checks Right and we would be writing the checks and entering the checks as we go And there would be certain things that we know that we would not have picked up that would be on the bank statement And those things would include things like the service charges the banks going to just take money out of our account For their fees we wouldn't know about that until we got the bank statement So we could do the journal entry automatically right here and it'll do a journal entry for us to record the fees The same might be with interest earned if we earned interest on our account Then we wouldn't know about that until they told us that on the bank statement. So we could record that as we go However, these days we actually have bank feeds So so those are things that might come through with the bank feeds So we would catch them as they come through our system Just like any other transaction and probably record them with the bank feeds making this whole little thing down here obsolete I never liked to use it in the first place because I would rather You know reconcile what I have I think it gets a little confusing When we were adding these so basically I would disregard For those two reasons this bottom bit here usually start reconciling All right, then we have our little worksheet up top So we've got the statement Indian balance the statement Indian balance is what we typed in here That was the 61 to 41 85 We just we just told quick books of that and then we have the cleared balance The cleared balance is zero at this point in time because it didn't give us any beginning balance and because we haven't checked anything off Down below Therefore we have a difference of 61 to 41 85 Our goal of the bank reconciliation is to get this difference down to zero when the difference is at zero Then we can reconcile the fact that this difference is that zero or when it gets to zero does not mean That our books will then match the bank books It does not mean that our books here this 88 810 will then be 61 to 41 85 what's on the bank statement because The cleared balance only represents those items that we checked off down here And if we didn't check it off Then it might still be a good a fair thing that we don't check off right because it might be an outstanding check or deposit Which would be the reconciling item? So this is just the cleared balance the beginning balance Plus the things that we checked off the things that we don't check off are the reconciling items the difference between the bank and The book things that were most likely be outstanding checks outstanding deposits Now how do we get to this cleared balance? Well, it's got your little arrows down here It's the beginning balance which that's going to be a problem because I don't have anything and it has 30,000 so we're that's a problem and then we have the the payments and The deposits which are the things that we're going to check off, right? So the deposits would increase this number the payments are gonna are gonna increase this number and so on so if I check all of these These boxes off and I tick and tie each of these items out perfectly Then my ending balance has to work meaning my additions and my subtractions that are the cleared balances We'll tie out to this and this exactly and and so it has to work, right? If there's something that are in the bank statement That's not on our books and we're gonna have to add it to our books unless the bank is wrong, right? But we can't do it in the first month because this 30,000 isn't in the beginning balances So even if I get this number and this number to be correct It's still gonna be a problem because I don't have the beginning balance. Well, what do I do about that? Well? This 25,000 you will recall is the 25,000 that we put into opening balances That's the beginning balance that we put into the system So that is really truly our beginning balance which should be over here in the beginning balance section But the fact that it's not isn't a big deal as long as we noted on the first bank reconciliation We could just check it off and there it is right there So so now basically by doing that I can say, okay, I have this one I have the top bit, but it doesn't tie out right if it matched I wouldn't have a problem if this was 25,000 then I would have the 25,000 right here Even though it's not in the beginning balance. It's in the wrong category It's still gonna be an increase either way and I could still reconcile