to really experience bank reconciliation you need to do a second consecutive month this
means two months in a row of the same company we will continue our story from the previous video
and imagine we're doing the second consecutive month from the same company file in the same
company what should we look for when we do the second following month well the ending balance
of January must be the beginning balance of February on the bank statement and in the
QuickBooks if it's different that means somebody changed something after you did January's bank
reconciliation the video that will follow this video will discuss how to find and fix those types
of problems the January outstanding checks should show up on February statement usually outstanding
checks in one month clear the bank in the next consecutive month the interest and service charge
will be about the same dates as they are in January that's because banks have monthly
procedures that usually happen on the same day each month and of course the interest and service
charge in our general ledger that show up on our trial balance will increase for the interest and
the service charge for the second consecutive month before you begin make sure you're using
the file from the same webpage as this video that file should include all of January's transactions
it should include the January reconciliation that we did together in the previous video and
it should include the February transactions in other words it's just like fast-forwarding time
one month from the previous reconciliation at the end of January to the end of February and now the
file is waiting for the February reconciliation after we open the appropriate file you can see
in the trial balance that the bank fees expense was the amount of the bank service charge from
the previous month's bank reconciliation and you will notice the interest income is the amount that
we put on the previous month's bank reconciliation after we do this month's bank reconciliation these
two accounts will increase by the amount of fees and interest for this second month once again we
will open the excel file that represents the bank statement and keep that open at the same time that
we have our QuickBooks file opened we can click from the task bar to switch back from one to the
other the first thing you should notice is that the beginning balance of February is the same
as the ending balance of January from the previous video you will also notice this February statement
is in the same format as the January statement the checks and deposits are all put together in
the same transaction list in date order and you're given a running balance if you scroll all the way
to the bottom you can see the ending statement date and you can see the ending statement balance
we have to open the Excel bank statement just like we did in the previous month and
the previous video we can switch back and forth between the excel statement and our QuickBooks
file by clicking on the task bar the first thing you might notice is that the beginning balance
of this month is the same as the ending balance of the previous month from the previous video
from the main menu click banking reconcile the first thing you notice is that it says the last
time it was reconciled was January 30th and it assumes the statement date is February 28th when
we click back on our Excel bank statement and scroll to the bottom we see that QuickBooks was
correct the statement date which is the cutoff date of the statement is February 28th you may
also notice that it remembers the correct beginning balance which we confirm at the
beginning of the statement is 27 thousand six hundred ninety-eight dollars and seven cents
if the beginning balance of the statement is not the same here in this window where it says
beginning balance it means somebody changed to January transaction after you did the January
reconciliation that is a big problem and we will learn how to solve that problem in the
video that follows this one now let's start recording the information on February 28th
what was the ending balance of the bank statement we scroll to the bottom and we notice the ending
balance was forty six thousand two hundred and five dollars and four cents let's simply copy
this into the correct field into QuickBooks if you can't copy and paste you have to type it in
yourself notice QuickBooks remembers the bank fees expense as the account that will record
the monthly service charge notice QuickBooks also remembers the interest income account that
will record the interest that QuickBooks puts into our bank account notice QuickBooks also
even remembered the day of the month that the bank usually records these transactions in this
case QuickBooks is correct the service charge was charged to us on the 23rd and the interest
was charged to us on the 17th so now let's copy the transactions into QuickBooks as we mark it
off bank statement the monthly service charge is $35 we highlight it in blue to mark it off
remember when we type in the service charge do not include the negative sign QuickBooks knows this is
a negative number because you're putting it in the service charge field the interest is on the
17th let's mark it off in blue as we copy it into QuickBooks when we're finished with this window
we click continue and we're halfway home now let's clear the deposits I noticed the first deposit on
the bank statement is zero zero zero five you can clearly see that this deposit is the same money
amount in both places this was the deposit that was in transit from the previous month and in the
previous video it now cleared this month's bank statement I'll mark it off as cleared by coloring
the cells in blue and I'll click the checkmark in QuickBooks the next deposit that cleared is
down here if you scroll down it's zero zero zero six you can see that this deposit is the same
money amount in both places I'll mark it off as cleared in the bank statement and I'll click the
check mark in the margin in the QuickBooks file the last deposit that cleared is all the way at
the bottom of the statement deposit zero zero zero seven cleared and you can see this deposit
is the same money amount in both places I'll mark it off as cleared on the statement and I'll click
the check mark in QuickBooks notice the cleared balance and the difference have changed since
we click the check marks and we notice we have no deposits in transit at the end of February
and now let's clear the checks check number 17 you can see is the same money amount in both places
let's mark it as clear it in the statement and click the check mark in QuickBooks check number
18 you can see is the same in both places let's mark it as cleared on the statement and click the
check mark in QuickBooks check number 19 you can see is the same in both places let's mark it as
cleared on the statement and click the check mark in QuickBooks check number 6 was outstanding from
the previous month and in the previous video and you can see that it cleared the bank statement
this month it's the same in both places so I will mark it as cleared on the statement and I will
click the check mark in the margin in QuickBooks check number 20 is the same in both places as you
can see I'll mark it as cleared on the statement and I'll click the check mark in QuickBooks check
number 21 is the same in both places I'll mark it as cleared on the statement and I'll click
the check mark in QuickBooks check number 15 is the same money amount in both places remember
the checks do not always clear the statement in numeric order that's why on the statement number
15 came after the others but regardless it's the same money amount so let's mark it off in both
places as cleared check number 16 is not on the statement when I scroll all the way up and all the
way down I can see that check number 16 is not on the statement you should not click the check mark
here in the margin because check number 16 is our first outstanding check for February check number
22 you can see clearly is the same money amount in both places let's mark it off as cleared and
check it off from the statement check number 23 is the same in both places let's mark it off on the
statement and click the check mark in QuickBooks we're almost finished check number 24 your eyes
can see are the same in both places let's mark it off the statement and click the check mark in
QuickBooks check number 25 you can see is the same in both places let's mark it off on the statement
and click the check mark in QuickBooks now we'll scroll all the way down to see the remaining
checks we have two checks remaining to mark as cleared remember the process is finished when
everything is marked off the statement but right now we only have two checks remaining now I move
the windows around a bit so you can see exactly what happens in this last part the second to
last transaction that will mark as cleared on the statement is number 26 because you can see check
number 26 is 20 to 80 36 in both places let's mark it as cleared on the statement and click the check
mark here in the QuickBooks notice the cleared balance has changed and now the difference is
only nine hundred four dollars and seventy seven cents that's the amount of the one more remaining
unmarked check that actually cleared the bank at exactly the moment you marco off the last item
from the bank statement that's exactly the moment that the QuickBooks difference becomes zero notice
check number 28 and 29 are outstanding checks they are not on this bank statement this bank
statement is completely marked off and now the difference between our records and the bank's
records is clearly zero we finished the process by clicking the button on the bottom reconcile
now click display to see both the summary and the detail you can browse the information and
see that it highlights the main points of this month's bank reconciliation and again normally
you would print the summary and print the detail and staple it to the February bank statement