Wednesday, January 23, 2013

GOAL SETTING - PART 4

      In yesterday's post, I took the reader through the steps toward obtaining a point in time checkbook balance;  analyzing the transactions which have cleared the bank over a period of time, say 3 months; writing these transactions in a blank checkbook register, with the purpose of arriving at a reasonably accurate account balance
    Having obtained an account balance, we maintain it by using the Check Register to record every transaction that flows through the checking account.
   Every month, when the  checking account statement comes in the mail, record the ending statement balance on a piece of paper.  On another column, record the running checkbook balance that is in the checkbook.  The job in balancing the checkbook is to adjust the checkbook balance so that it matches the ending statement balance.
  • Step 1 - The Checks and transactions listed on the monthly statement are the transactions which have cleared the bank.  The first step is to go through all the transactions on the statement, and check them off in the check register.  Once that is done, all the transactions not checked off in the register are known as Outstanding Transactions.  
  • Step 2 - Write down and total all the credit transactions and add them to the statement balance.
  • Step 3 - Write down and toal all the debit transactions and subtract them from the statement balance
At this point the two balances should  be equal.  When they are equal, the statement is balanced.

No comments: