Question

Question 2 facts – Joe reconciles his checking account check register to the penny every month with the bank’s statement. After accurately recording all of the transactions that he initiated during the month, his check registered showed a balance in his checking account of $1,900 as of the end of the month. When he received his bank statement for the month, he noted for the first time the following as of the end of the month: outstanding checks - $300; service charge for safe deposit box - $25; interest earned on the account - $1; unrecorded (by Joe) automatic electronic funds transfers for his monthly car insurance - $75; Joe’s check #1162, which he correctly wrote for $20, actually cleared his bank account for $200 (he called the bank immediately!) and the bank’s statement balance of $1,921.

Question 2 (8 points) – What should Joe’s check register show as the correct account balance in his checking account as of the end of the month?

Answer 1

Correct Account Balance is - 1801

Before answering this Question,

Let us first understand that what is Check Register?
Check Register is basically the register maintained by an individual (Joe, in this case) on his own.

In simpler terms, it like managing the details of your incomes and expenses and further checking the balance from the bank statement to check whether the details maintained by you are really correct or not.

Now coming to the question, there could be some items that can be directly routed through bank statement and we may not have recorded the same in the check register.

At the end of every month, both the check register and bank statement should be checked and if the balance is not matching then atleast we must maintain the reconciliation of it.

This question pertains to BANK RECONCILIATION with the CHECK REGISTER

Check Register Balance

Particulars	Amount	Remarks
Check Register Balance	1900
Service Charge for safe deposit	-25	Bank Directly deducts it from the bank statement, so we may not have been recorded the same in our records. Now booking it.
Interest on the earned account	1	Directly credited to our bank account. Now recorded the same
Monthly Car Insurance	-75	Automatic Electronic transfer. Now recorded
Adjusted Check Register Balance	1801

Bank Balance

Bank Statement Balance	1921
Outstanding Checks	-300	They will be cleared soon
Amount wrongly debited from the bank account	200	Joe’s check #1162, which he correctly wrote for $20. That means Joe issued checks to third party of 20$ and instead of 20$, 200$ deducted from the bank. Bank will add the same 200$ and debit the bank with 20$
Amount that needs to be debited from the bank account	-20	Joe’s check #1162, which he correctly wrote for $20. That means Joe issued checks to third party of 20$ and instead of 20$, 200$ deducted from the bank. Bank will add the same 200$ and debit the bank with 20$
Adjusted Bank Statement Balance	1801

P.S. - Please consider like the check register has been maintained by you. This will give you more clarity to your question.

Thanks