and now we will learn how to find and fix mistakes during the bank reconciliation
process this will be the third consecutive month of bank reconciliation and we're imagining it's
the same company that we did bank reconciliation for in the two previous videos there are four
mistakes in this file you will find them as you do the bank reconciliation process first
try to fix them yourself as you do the marked reconciliation see if you can get the numbers
to match after finding and fixing all four of the mistakes in this video assume the bank is
correct go slowly be careful and write down the mistakes that you see to make sure they're the
same as the ones that I will show you after you try it yourself you can unpause this video and
watch me do the bank reconciliation and find and fix the four mistakes as I go along but right now
I suggest you pause this video and try the March reconciliation yourself so here's the March bank
statement in the format of an Excel spreadsheet notice the beginning balance is 46 thousand two
hundred five dollars and four cents and if you remember the prior video that was the ending
balance of the February statement we come back to QuickBooks and click banking reconcile immediately
we notice that the beginning balance listed here is different than the beginning balance from the
statement something has changed notice it was less reconciled on March quickly notice that
the beginning balance is actually higher than it was before now in a situation like this the
way to find out what happened is to open the report called reconciliation discrepancy make
sure it's for the correct bank account and notice that check number eight which was dated January
fifteenth was changed the original amount was 925 and the effect of the change was positive
six hundred thirty dollars positive to the account that means that whatever we did increased our bank
account by six hundred and thirty dollars so can you figure out what the change was if you figured
it out then you have figured out mistake number one out of four the discrepancy report showed
that check number eight from January 15 had been changed to an amount of $295 from nine hundred
and twenty-five dollars that's because if the bank account increased by six hundred thirty and this
check was changed that means that this check was decreased by 630 and therefore it has been changed
to two ninety-five well what do we need to do we need to change it back the quickest way to
find check number eight would be to click Edit find and then choose check and then put number
eight now check number eight is in front of us and we need to change it back to 925 double click
change the amount back to 925 of course you have to make sure when you're in the check window that
you change it in both play oh it automatically changed it in both places so you don't have to
worry click Save and close at the bottom and don't worry about this message because we know
what's going on and we know why we're changing this with changing it to fix it so we click yes
now let's see if the problem is fixed we click reports banking reconciliation discrepancy click
OK and notice there are now no discrepancies on the discrepancy reconciliation report and when
we click banking reconcile we notice that the beginning balance has been changed and fixed to
become correct the beginning balance listed here in QuickBooks now matches the beginning balance
of the statement now let's continue the process the way we did before and see what other mistakes
come up as we go along let's go ahead and enter the ending balance which in this case is 64,000
590 751 so let's see if I'll be lucky enough to be ok good now the service charge remember once
we record it into QuickBooks we have to mark it off on the statement the service charge is $35
the way it normally was and we mark it off with a nice shade of blue remember we put it in as a
positive number because QuickBooks already knows that it's negative and the date in this case is
March 26th we came very close good the interest we earned in this month was actually 1 27 27
let's mark it off as we enter it into QuickBooks 127 point 27 and the date that the interest was
given was March 19th slightly different than the previous month now we're finished with
the first window and we can click continue and we are in the second window for reconciliation
now in this window let's just first see if the deposits are okay we scroll up and we see the
first deposit number eight is eighty thousand twenty I happen to know that that matches here
deposit number eight eighty thousand twenty I mark it off in both places the next deposit is
deposit number nine seventeen thousand eight hundred forty and I happen to know that that's
the same as deposit number nine here so I mark it off in both places however when I look at
the statement I do not see deposit number ten deposit number ten is nowhere on the statement
and therefore deposit number ten is a deposit in transit and should show up on the April statement
next month but because it's not a March deposit on the March a statement we will not mark it off
so now we're done with the deposits now let's go through the checks very carefully the first
check that cleared during March was apparently March 30th for 678 oh nine I happen to know that
that's the same in both places check number thirty six seventy eight oh nine okay be patient and stay
with the story check thirty one for two hundred ten dollars and five cents I happen to know is
the same in both places check number 32 is one sixty eight seventy six on the statement however
when I look at check number thirty-two here in the computer I see it's four 186 seventy six so
I found somebody's mistake again the check number thirty-two is 186 and QuickBooks but it's 168 on
the bank statement well congratulations we now found mistake number two mistake number two is
the March 7th check for number check number 32 to Verizon was transposed a number it was supposed
to be 168 and we accidentally recorded it as 186 what do we need to do we have to change it
back no problem so let's leave the reconciliation window because QuickBooks will remember the check
marks that we placed let's remove this and go to the finder to find check number 32 edit find
check number 32 here it is let's double click and change it to what it's supposed to be 168
point 76 push tab notice it's the same amount in both places we click at the bottom save and
close do you want to save the changes yes now let's go back and continue to reconcile banking
reconcile QuickBooks remembers everything you put in the first window click continue and QuickBooks
remembers the previous check marks now that check number 32 is correct we can mark it as cleared in
the QuickBooks and we can also mark it as cleared on the bank statement let's continue check number
16 is 570 33 I happen to know that that's the same thing here in the QuickBooks file
check number 33 is 654 I happen to know that's the same as it is in the QuickBooks file check
number 37 is 990 166 on the statement however when I look in the QuickBooks I don't even see
check number 37 check number 37 has never been recorded in QuickBooks so why is it on the bank
statement well congratulations we found mistake number three mistake number three is that check
number 37 dated March 22 Verizon for nine hundred ninety one dollars and sixty six cents was never
recorded into QuickBooks maybe the bookkeeper wrote the check and sent it out and forgot to
record it into QuickBooks but the bank didn't forget they paid Verizon and they put it on the
statement so what do we need to do to fix this you have to record the cheque and then go back
and reconcile let's close the reconciliation window click banking write a check the date
of the check that we were supposed to record was March 20 it was checked number 37 the amount was
990 166 and of course the check was payable to Verizon so now that you have all the information
regarding the check and now that you've recorded the check I have no idea why you'd put the expense
on a different line than the money amount but this is the way the check is supposed to look
when you record it when we click Save and close we can just go back banking reconcile quickbooks
remembers everything we put in the first window now we're back in the second window
and check number 37 is right here let's mark it as cleared in the QuickBooks reconciliation
window and let's also mark it as cleared on the bank statement now we can continue check number
29 for 75 dollars and 76 cents is also here for the same amount let's mark it as cleared in both
places check number 35 is for 88-89 i happen to know that that's the same in both places
check number 36 is 350 in both places
check number 34 is 2200 two dollars and 48 cents in the bank statement and check
number 34 is the same amount in the quickbooks records so I will mark both of them as cleared
check number I guess that's everything so far check number 38 is four hundred ten dollars and
eleven cents in the bank statement when I look at the quickbooks records i see check number 38
is the same amount so i mark it as cleared in the quickbooks records and i mark it as cleared on the
bank statement now the remaining difference is seven hundred sixty dollars and 80 cents before
i clear the very last check on the statement the very last check on the statement is seven
hundred sixty dollars and 80 cents that happens to be the difference before I mark the last one
as cleared so I'm going to mark the last one as cleared on the statement which means everything
has been marked off the statement and at the moment I clear the last one from the statement
which was the 7680 boom ladies and gentlemen now the difference is zero congratulations you
found and fixed all four mistakes the other three checks that are still unmarked and
the other deposit that's still unmarked or simply outstanding and they will clear in the next month
we click reconcile now and we run our reports and now we are experts in bank reconciliation