Framework for Career Education and Consumer, Family, and Life Skills
Classroom Activity by New Jersey Educator
Title: Preparing a Bank Reconciliation Content Area: Career Education and Consumer, Family, and Life Skills Grade Level: 9-12
Author Information: Name: Andrew Bellin and Sheree Green School: Teaneck High School District: Teaneck Public Schools County: Bergen
Student Learning Objectives: Students will be able to: 1. Explain the terminology associated with the banking unit and specific terms found on bank reconciliations (e.g., outstanding checks, service charges) 2. Write checks and make deposits in a check register. 3. Use a check register and teacherprepared bank statement to correctly prepare a bank reconciliation statement.
NJ Core Curriculum Content Standards Content Standard Grade Strand Area Language 3.1 12 F Arts Literacy Career 9.2 8 E Education and Consumer, Family, & Life Skills Mathematics 4.1 12 A Mathematics 4.5 All A Mathematics 4.5 All B Mathematics 4.5 All C Mathematics 4.5 All D Mathematics 4.5 All F
CPI 1-3 1
1 1-4 2 3,4 1 1,2
Purpose and Overview: The purpose of this lesson is for students to recognize the importance of preparing bank reconciliations. Young people today need to understand the importance of preparing monthly bank reconciliation as part of a personal or business account. Students need to be able to explain why it is important to record all deposits, payments, bank withdrawals, and ATM transactions in your checkbook register.
Instructional Activities: 1. Teacher will demonstrate how to record transactions in a checkbook register using both the overhead projector and computer-generated spreadsheet, such as EXCEL. 2. Using several teacher- prepared examples, students will record deposits, checks written, and ATM transactions in a checkbook register. 3. Next, a teacher- led discussion will follow about the importance of preparing checkbook bank reconciliation. New terminology will be discussed and a handout of an easy- toprepare bank reconciliation will be distributed. See “Document #2.” (It will be noted that often reconciliation forms are printed on the back of bank statements). Together the class will work on simple to more difficult problems. 4. Students will individually work on two bank reconciliation problems and bring them to the teacher for verification of their correctness. See “Document #1.” 5. A homework assignment will be given; a quiz will follow; and finally, bank reconciliations will be part of the unit test on banking.
Additional Information: Note: There are many examples of bank reconciliation problems in general business, financial planning, and accounting textbooks. Problems are easy to make up. Always make sure the problem works before assigning it to students.
Document #2 BELOW YOU WILL FIND SEVERAL SITUATIONS THAT OCCUR IN BANKING. WE WILL BE PREPARING BANK RECONCILIATION FOR EACH SITUATION. PLEASE FOLLOW THE FORMAT THE TEACHER HAS GONE OVER WITH YOU IN CLASS. SITUATION 1: Mary Kelly’s bank balance on October 1 was $462.50. During the month, she deposited $146.50 and, at the end of the month, her bank balance was $435.75. How much did she withdraw from the bank during the month? SITUATION 2: Guy Horton’s bank statement showed a balance of $78.64 on June 30. His checkbook balance on that date was $249.64. Checks for $18.50 and $13.50 were outstanding according to the checkbook balance.The bank had deducted $3.00 for the monthly service charge. Do the balances match? If there is a problem, what might be the issue? Why is this important? SITUATION 3: Jon Williams keeps the books for Tom’s Tavern. Today he got the monthly bank statement and decided to reconcile it with the check register. The following information is needed to prepare the bank reconciliation. Ending bank statement balance $965.02 Ending check register balance 936.68 Interest earned on the account 18.92 Total of all service charges 8.40 Deposit sent but not on bank statement 458.18 Outstanding checks: No.712 $75.50 No.715 23.48 No.722 250.00 No.724 109.02 Canceled check No. 750 was correctly written for $35, but was incorrectly recorded in the check register as $53.00. Reconcile the accounts.
Document #1
NAME
DATE
BANK RECONCILIATION ASSIGNMENT
Bank Statement Balance Add: Deposit in Transit
$
Checkbook Balance Add/Subtract Corrections Add: Interest Income Less: Service Charges
$
Less: Outstanding Checks #101 $ #105 #107 Total O/C Available Bank Balance $_________
________ $________
Correct Checkbook Balance