Here happen to be three unrelated what to illustrate this easy-to-remember guideline:
Item 1. The lender statement shows a protection payment of $6.00. Since this bank payment is demonstrated on the lender statement, you must PUT IT WHERE IT IS NOT. This means you will have to subtract $6.00 from the money balance displayed in your records.
Item 2. Your records indicate that $150 was deposited nearby the end of the time indicated on the lender statement. On the other hand, the deposit isn't demonstrated on the lender declaration. After confirming that the lender possesses received that deposit, PUT IT WHERE IT IS NOT. You should add $150.00 to the total amount demonstrated on the lender statement.
Item 3. Of the numerous checks written, four include not yet cleared the lender. Because the four checks happen to be in your information, but aren't yet on any lender statement, Set THEM WHERE THEY AREN'T. Deduct the levels of the four checks from the total amount on the lender statement. (Occasionally, a number of checks written in earlier months will be among the checks certainly not yet clearing the lender account.)
Each of the things that you should placed into your accounting records calls for two accounts as a result of double-entry accounting. Item 1 calls for a cash accounts and a cost account. In accounting conditions, this means a credit rating to the account Income for $6.00 and a debit to the consideration Bank Fees Expenditure for $6.00. (No access was necessary for Item 2 or Item 3, since these things already are in your records.)
After adjusting the total amount on the lender statement and the total amount in your records, both adjusted balances should concur. If the modified balances usually do not agree, it is advisable to assess every item in your information and on the lender statement. It's possible that you or the lender may have entered a quantity incorrectly. As well recheck your math.
You can read a far more detailed discussion of this issue Bank Reconciliation and several other accounting issues on AccountingCoach.com.