your heel what's up we're doing a
another little daytime action doing some
daytime action so but I don't even care
about none anymore anyways who are you
I'm CPH strength I'm the strongest
licensed CPA in the state of Florida
what you do see if you have strengths I
teach the world accounting through
basics to the basics of the building
blocks of ability blocks to the building
blocks before we get into this this
specific video I want to point out this
card over here which if you click on
it'll bring you to the best playlist in
the world with accounting it's my
playlist that's growing you know almost
every day with your videos it's it's the
go-to place that I wanted to be the
resource of the internet for accounting
anyways this video this video I'm saying
can you see the top of that let's bring
this up just to shimeji here because
that was annoying me okay something
looks off about this setup who will work
on it that always work in progress this
is number 58 accounting for beginners
this is my classic series very proud of
this series classic series this is
number 58 yeah I've done 57 of these
before of these accounting for beginners
is accounting for beginners number 58
bank reconciliation kind of a big deal I
have done some questions on my
reconciliation so that's why we're doing
this video I want to try to just do a
brief set brief write yet for you sure
but I wanted to show why you would need
why you would need a bank reconciliation
and I think if I can give you the the
behind the scenes then maybe we can do
an example or two and I think you'll
have the gist of bank reconciliation
especially for beginners like we're just
doing you know there's the beginners and
I'm thinking that you have no idea what
bank reconciliation is you have a class
or you want
reconcile your bank account for the
business that you own or I don't know
why but you you want to learn you're
here so you here's the next hit the next
in order of the county for beginners or
you typed in bank reconciliations and
here you found me so yes number 50 for
beginners on our 58 bank reconciliation
I don't know why but I feel like writing
the debit and credit this is my mapping
system so if you don't know that you
really learn the truth looking for
accounting you really did a Democrat at
such an expense level to equity revenue
you really need to know those besides
that though bank reconciliation like
most things in accounting if like that's
why I don't want people to abbreviate in
bank rec what's a bank rec you know I
don't know what the rec is but
especially if you're a beginner write it
out bank reconciliation now when I think
of a reconciliation for some reason I
think of two two sides that have
different different opinions and they
come to you and they reconcile their
differences and and you know right off
into the sunset but they reconcile they
come together so there's differences and
they come together that's a
reconciliation so think about that so
you have a bank reconciliation so you a
reconciliation is differences so you
have some differences and you have some
differences in the bank bank
reconciliation okay well that is
actually what a rectum bank
reconciliation is because you have you
have a difference between a bank account
and your personal books so why is there
a difference of someone wrong and I'm
going to show you that what's really
wrong in this and it happens quite often
that's a reconciliation you have
differences why would you have
differences now I want to go in this in
this video like why you would have
differences and so let's just go let's
get back into the dill this is global
banks Bank America
a PMC whatever just global banks it's
the monthly statement Dutch that you
guys you you run tripperz Inc get them
tripperz up Inc incorporated and this is
the bank statement for chip presenting
for December 16 12 116 212 31 16 that's
where the bank statements for we're
going to get to the bank statement but
here this is a bank statement orange
over here in purple this is chippers
that's our conferences are we write our
stuff down and I don't know how you want
to call it a ledger you know a journal
your books nice work
I don't think that's so much important
what you want to label the item that is
that you use internally for your
business this is this or to write but
let's just what did you do what did you
do
and this shippers in December you wrote
four checks you wrote four different
checks in December check number one for
two thousand check number two for two
thousand check number three for mm
chuckling four for two thousand twenty
eight thousand dollars in checks okay
you with me you wrote eight thousand
dollars in checks you have in your books
I just like to call them books but you
know your paperwork you have in your
paperwork they're your books that you
have a beginning balance of $5,000 you
had deposits of you had a direct deposit
of $5,000 in the month of December so
beginning ground plus deposits is you
had $10,000 total in your business
that's how much that's how much you have
in your books that should be in your in
your bank account now you wrote now
you're going to subtract eight thousand
dollars in checks right so we'll check
one two three four four two thousand
dollars ages eight thousand dollars in
checks so you wrote those checks so you
would subtract the eight thousand
dollars and your ending balance and your
bank account in your books in your book
cash ledger I need some beer the cat
your cash your checking account whatever
in your books would be $2,000 $2,000
right as you started with five you made
five you had ten and then you had $8,000
and four checks or is everybody with me
that seems pretty basic is all it
happened that one now what happened on
what happened on your bank statement
here same thing here and then this is
the bank statement you probably get them
online or whatever or they might send to
you if still but the bank statement you
started with $5,000 so you have $5,000
deposit so $10,000 just like just like
in your books down here but this is the
bank bank statement books bank statement
books so everything is the same in the
bank statement or the books for the
December here except here we get to our
difference
there's only checks won and checked to
have been cashed that so there's only
there's only $4,000 of checks and the
bank statements that means there's you
start with $5,000 $5,000 deposits so
$10,000 total in the bank account and
then you subtract for for the checks
that have been cashed and you have to nd
the bank statement has an ending around
6,000 the bank statement has an idiom
6,000 dick any balance of 6,000 your
books have an ending balance of 2,000
those difference of $4,000 and there
well what is the difference of it we've
had attended I try to keep it pretty
simple whoever had a check whoever has
check three
and whoever got issued check for never
catch them so you just you just rode
wrote a check like this is to John and
white so you wrote a check for my
checkbook John one check for you John
one check for you Mike now they're going
on their way I don't know what they did
to their checks but until until they go
to their bank or wherever and they cash
it your global bank statement you're
stating you're the global banks not
going to know about any of these checks
and telling a cashed by the time the end
of the month came up twelve thirty one
to the cheque number three in cheque
number four when I cashed so I hope this
is clip this makes it clear why you
would have a difference because you
would write a check you know I think the
most common examples you write a check
to somebody and it would not be tasked
by the end of the month until the bank
statement wouldn't know about it because
how would the bank know about it if it's
not been cashed you have a whole book of
checks that are blank you know also the
bank has no idea until you write one out
and someone catches it why you would
have a difference that's why you would
need a bank reconciliation and it's not
it's usually not this easy like you
can't like you don't usually have well
maybe you have a thousand checks in a
month or a period not not just for so
and you have outstanding ones from
months before and there's other things
like deposits and transfer there's a
bunch of reasons why you might need to
reconcile why is it important to keep
good records I mean there's so many
different reasons why let's say I have a
few minutes let's just take why it would
be important to acknowledge lay why in
real life why you can't just say oh I
have six thousand like how much one do
you have I don't know let me look at my
let me go online and online in my bank
accounts of those ten thousand dollars
so that's how much that's how much money
I have right
so you know $6,000 how about let's say
hypothetically you got some great some
good deal over there some deal you got
to deal you see a deal or something
that's $5,000 and you're like oh okay
well how much do you say we had in the
bank account
we had $6,000 so we're going to spend so
let me just correct you a check for
$5,000 because it looks so good so you
write a check for $5,000 well the next
times you have six well you do have six
in there but you give it you son you
send this check out for $5,000 you give
it to somebody for $5,000 checks three
and four
both get cached before the person cashes
this $5,000 check right so stay with me
so both of these attach the checks then
you would end up then you have $2,000
you have what you would have it would be
reconciled or never because everything
everything would be in so you'd only
have $2,000 then then you have this the
person who tried to attach this check
for $5,000 of insufficient funds and a
whole storm of things
so anyways hope you enjoyed bank
reconciliation this was just an overview
oh I let's think more do I just want to
keep it positive this was this was
accounting for beginners number 58 we're
going to do 59 next hope to seeing in
the next video if if not well come on
just come on anyways have a great day
evening night wherever it is stay
positive chase your dreams let's go