not subtract interest earned

Oct 13, 2025 by pinkandtrash.com 55 views

When comparing a check register balance with a bank statement, it's essential to ensure accuracy and account for any discrepancies. A check register is a record of all transactions, including deposits and withdrawals, while a bank statement provides a detailed account of the account's activity. To reconcile these two, you need to subtract certain items from the check register balance. In this article, we'll explore which items should be subtracted and why.

Interest Earned

Interest earned is the interest accrued on your account balance. This is a credit to your account, not a debit. When comparing your check register balance with the bank statement, you should not subtract interest earned. Instead, you should add it to your check register balance to ensure accuracy.

ATM Withdrawal Fee

ATM withdrawal fees are charges levied by the bank for using an ATM. These fees are typically deducted from your account balance. When comparing your check register balance with the bank statement, you should subtract ATM withdrawal fees. This is because these fees are debits to your account, and you want to ensure that your check register balance accurately reflects the actual balance in your account.

Outstanding Deposit

Outstanding deposits are deposits that have been made to your account but have not yet been processed by the bank. When comparing your check register balance with the bank statement, you should not subtract outstanding deposits. Instead, you should add them to your check register balance to ensure accuracy. Outstanding deposits are credits to your account, and you want to reflect the actual balance in your account.

NSF Fee

NSF fees (Non-Sufficient Funds fees) are charges levied by the bank for overdrafts or bounced checks. These fees are typically deducted from your account balance. When comparing your check register balance with the bank statement, you should subtract NSF fees. This is because NSF fees are debits to your account, and you want to ensure that your check register balance accurately reflects the actual balance in your account.

Conclusion

When comparing a check register balance with a bank statement, it's essential to subtract certain items to ensure accuracy. These items include ATM withdrawal fees and NSF fees, which are debits to your account. On the other hand, interest earned and outstanding deposits should be added to your check register balance to ensure accuracy. By following these guidelines, you can reconcile your check register balance with the bank statement and ensure that your account is accurately reflected.

To reconcile your check register balance with the bank statement, follow these best practices:

Compare the dates: Ensure that the dates on your check register balance and the bank statement match.
Identify discrepancies: Look for any discrepancies between the two, such as missing or incorrect transactions.
Subtract debits: Subtract ATM withdrawal fees and NSF fees from your check register balance.
Add credits: Add interest earned and outstanding deposits to your check register balance.
Verify the balance: Verify that the balance on your check register balance matches the balance on the bank statement.

By following these best practices, you can ensure that your check register balance accurately reflects the actual balance in your account.

When reconciling your check register balance with the bank statement, avoid the following common mistakes:

Not subtracting debits: Failing to subtract ATM withdrawal fees and NSF fees from your check register balance can lead to inaccurate reconciliations.
Not adding credits: Failing to add interest earned and outstanding deposits to your check register balance can also lead to inaccurate reconciliations.
Not verifying the balance: Failing to verify that the balance on your check register balance matches the balance on the bank statement can lead to inaccurate reconciliations.

By avoiding these common mistakes, you can ensure that your check register balance accurately reflects the actual balance in your account.

Conclusion

Reconciling your check register balance with the bank statement can be a daunting task, especially if you're new to accounting or banking. In this article, we'll answer some frequently asked questions (FAQs) about reconciling check register balance and bank statement.

Q: What is the purpose of reconciling check register balance and bank statement?

A: The purpose of reconciling check register balance and bank statement is to ensure that your account is accurately reflected. By comparing the two, you can identify any discrepancies and make sure that your account balance is correct.

Q: Why is it important to reconcile check register balance and bank statement?

A: Reconciling check register balance and bank statement is important because it helps you:

Identify any errors or discrepancies in your account
Ensure that your account balance is accurate
Prevent overdrafts or bounced checks
Maintain a healthy relationship with your bank

Q: What are the common mistakes to avoid when reconciling check register balance and bank statement?

A: Some common mistakes to avoid when reconciling check register balance and bank statement include:

Not subtracting debits (such as ATM withdrawal fees and NSF fees)
Not adding credits (such as interest earned and outstanding deposits)
Not verifying the balance
Not comparing the dates on the check register balance and bank statement

Q: How often should I reconcile my check register balance and bank statement?

A: It's recommended to reconcile your check register balance and bank statement at least once a month. However, if you have a high-volume account or make frequent transactions, you may need to reconcile more frequently.

Q: What should I do if I find a discrepancy between my check register balance and bank statement?

A: If you find a discrepancy between your check register balance and bank statement, you should:

Investigate the discrepancy to determine the cause
Contact your bank to resolve the issue
Update your check register balance to reflect the corrected balance

Q: Can I reconcile my check register balance and bank statement online?

A: Yes, many banks offer online banking services that allow you to reconcile your check register balance and bank statement. You can also use mobile banking apps to reconcile your account.

Q: What are the benefits of reconciling my check register balance and bank statement?

A: The benefits of reconciling your check register balance and bank statement include:

Accurate account balance
Reduced risk of overdrafts or bounced checks
Improved relationship with your bank
Increased financial control and awareness

Q: Can I reconcile my check register balance and bank statement if I'm not good with numbers?

A: Yes, you can reconcile your check register balance and bank statement even if you're not good with numbers. You can:

Use online banking services or mobile banking apps to simplify the process
Ask a friend or family member for help
Contact your bank for assistance

Conclusion

Reconciling your check register balance and bank statement is an essential task that helps you maintain accurate financial records and prevent errors. By following the guidelines outlined in this article and avoiding common mistakes, you can ensure that your account is accurately reflected and you can maintain a healthy relationship with your bank.