Bank Reconciliation--Outstanding Checks - YouTube

Hello everyone! So the other part of the bank reconciliation that I get a lot of

questions on is how do I find outstanding checks. So first we're gonna

focus on payments. So cash payments, meaning we've paid something, we've

recorded it in our GL, and over here is the banking activity for checks and

other deductions or withdrawals ,if you will. So notice here the total amount of

cash payments that we've recorded in the GL on the books side, over here is nine

thousand nine twenty nine, which is reflected right here, the credits to cash

during the month of April. And over on the banks side, they've reflected six

thousand three sixty one in deductions. So clearly there's a miss...a few of

these checks, that we've written, that haven't cleared yet. So we're gonna do

something similar to what we did with deposits and basically when you're

reconciling and figuring out the true cash balance at the end of the month, you

have to compare your two records of cash: your books side and your banks side, And

anything that's recorded on both sides is already reflected and doesn't need to

be reconciled. And so that's what we're gonna do we're gonna see what's on both

sides and eliminate those items. So check number three thousand one thirteen, for

one thousand five thirty three, cleared on April 7th. So we can just cross

that out. And let's go three thousand one fourteen for $1685, there we go it

cleared on the 15th. So there's always a timing delay, because we have to

wait for the payee to actually go to the bank and deposit this check that we

wrote. So we send that check to our payee, we have to wait until they actually make

the deposit to see it reflected in our bank statement. So that could take months

sometimes. Check 3115 for $1730, I see something clear for $1370s, so you know

what, that's probably an error in recording of this. Whatever cleared is

the correct amount. So this is actually not a bank error, but rather a book error.

So we're gonna reflect this book error for the difference on the book side. And

we recorded too much of a withdrawal. The actual check was for $1370

versus what we recorded it as $1730. So we need to add back

for the difference in our reconciliation on the book side because it's a bookkeeping

error. 3116 for twenty one dollars and I see it

clearing on the 18th. 3117 for $835

cleared on the 26th. So I can clear that. 3118

for $80 cleared on the 30th.

And let's see $541, $991, $216, and then $2,297, if you look over here didn't clear.

So this is our error (Ck3115) it's not going to be an outstanding check,

it's our error. These (4 circled) are going to be our outstanding checks. We wrote these checks

during April, but they haven't cleared the bank statement as of April 30th. So

they're outstanding until they clear the bank statements. So we could have checks

that we wrote in January, possibly the previous December, that are still sitting

as outstanding checks, and they're going to remain on as outstanding checks until

they actually clear the bank statement. The other items on the bank side.So

outstanding checks, we're going to reconcile on the bank side, because

they're already reflected on the book side. The transactions on the bank side

that we don't have reflected in our books yet are the service charge, $10. So

we're gonna adjust this on our book side and we're gonna subtract for that

service charge ,just like we're gonna subtract on the bank side for those

outstanding checks, because these are cash flows going out. We have an

electronic funds payment ($351), this is going to be a subtraction on the books

side, because if you notice it's on the bank side but not on the book side. Sorry

my dog just woke up and said hello. And then we have this unauthorized signature

on the 14th, yes rather the 14th it clearly was not recorded on the book

side. So this might be something they want to look into a little further, but

it's going to be an adjustment on the book side. And it's also going to be

reduced on the book side, because again it's a deduction. I hope this helps. Let

me know if you have any questions and have a great day!