First Month Bank Rec Procedures Beginning Balance Adjustment
How to do the first month’s Bank Reconciliation? The steps for the very first-time bank reconciliation are special when reconciling an old account that has past month transactions that have never been reconciled. QuickBooks Online is the example software used in this tutorial, to explain the first month’s bank reconciliation and why it is special. It requires a beginning balance adjustment if you are reconciling an old account for the first time. A practical example of beginning balance adjustments for an old account and new account are demonstrated. This will answer all questions about why the first month’s reconciliation is special and after watching this video, you will be prepared for anything that could happen during the first month/first time bank rec.
The exact steps are to first clear all past months’ transactions from prior months that were never reconciled. Then, after reconciling the current month normally, make your beginning balance adjustment for what the starting month’s balance should have been if you never entered it or entered it wrong. However, if one of the past month’s checks really never cleared, and you marked it as cleared as part of the beginning steps, then it will soon appear on a future month’s bank statement. You will have to make another beginning balance adjustment in the month that it actually clears, to fix the “reconciliation discrepancies” account and “zero out” the adjustment account after all past month’s checks have cleared. A practical example of how to do this is shown here. If you can get this point, then there is no Bank reconciliation problem that you cannot solve!!
Table of contents:
00:00:00 Chapter 1 Introduction To Reconciling An Old Account
00:02:27 Chapter 2 What Is A Beginning Balance Adjustment
00:03:56 Chapter 3 Set Up For Practical beginning balance Adjustment Example
00:08:36 Chapter 4 What Else Is Needed For The First Month Bank Rec
00:12:02 Chapter 5 Specific Steps For First Time Reconciling An Old Account
00:12:27 Chapter 6 How To Clear All Prior Month’s Transactions
00:17:02 A Chapter 7 Practical Example Of Reconciling An Old Account For The First Time
00:23:20 Chapter 8 How To Use The Batch Undo Feature To Undo All Past Month’s Reconciliation
00:32:20 Chapter 9 Demonstration Of First Month’s Beginning Balance Adjustment
00:36:19 Chapter 10 Adjusting For An Uncleared Check
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