Balancing G/L with Task 20 - Check Account - Multiple Divisions

The instructions from the document titled “Check Account Reconcile Bank Statement using One Checking Account” or “Check Account Reconcile Bank Statement using Multiple Checking Accounts” will be needed. When finished following the procedures on either of these documents each month, the balancing report will have amounts for: NEW BANK BALANCE, CHECKBOOK BAL and an OUT OF BALANCE.

The NEW BANK BALANCE must balance with the bank statement ending balance.
The OUT OF BALANCE must be zero.
The CHECKBOOK BAL is the balance of your checkbook if ALL of the deposits and checks cleared the bank.

Note: To make the monthly procedures much easier, follow the instructions on the document “Balancing A/R $ Received with A/P Check Account” on a daily basis.

Each month post the A/R and A/P interfaces into the G/L module. Then post any recurring and monthly manual journal entries. The next procedure is to print the G/L Trial Balance. On this report each G/L account, with a balance, will have an ending balance. The ending balance for the Checking Account’s G/L account number should match the CHECKBOOK BALANCE on the report printed when reconciling to the bank statement. If there is a discrepancy between the CHECKBOOK BALANCE and the G/L trail balance checking account ending balance read below to help find it.

As you are following this document you may find you need to make manual journal entries. Keep a list of all of the manual journal entries you will need to make and a detail description of why they are needed. Then at the end make all the manual journal entries at one time.

For this document the example for the G/L account number for the Checking Account is 102-00-01. We will also say we are balancing August 20xx.
You will need the G/L Trial Balance for account #102-00-01 with DETAIL for the month balancing, and for this example it is August 20xx.
Also needed is the Check Account report printed when balanced to the bank statement for the month your balancing, for this example August 20xx.
On the G/L Trial Balance report you will see debits & credits with the SOURCE column of A/R & A/P. First you must verify each one of these.

STEP 1 A/R SIDE:

Go back to the A/R to G/L Interface report previously printed for the month balancing. You may go to the summary section.
- Highlight all of the lines with the G/L account #102-00-01. These should be in the Cash section of the interface. Under the SOURCE column it should say TOTAL CASH (From Cash History) or TOTAL MISC CASH (From Cash History).
- Subtract the credits (B) from the debits (A). Notate this sum(C). A=ACCT.102-00-01 (DEBITS), B=ACCT. 102-00-01 (CREDITS), A-B=C
Go to the G/L Trial Balance (Task 9 in G/L module) and print for the cash account, i.e. 102-00-01. Under the column “SOURCE” look for A/R, and under the column “TRX REFERENCE” for AUTOMATIC INTERFACE TO G/L.
- Highlight these debits (D) & credits (E). Then subtract the credits (E) from the debits (D). Notate this sum (F). This sum should be the same as the sum 1.b. above (C). D=G/L TRIAL BALANCE A/R COLUMN DEBITS,E=G/L TRIAL BALANCE A/R CREDITS, D-E=F with F=C.
Go into A/R, Cash/Receipts History (Task 20), Print Selected Records (Sub-task 4) and print a report for the month balancing, i.e. August 20xx, for customers 1-99. The “Total Cash Received” on this Cash History report is the total of the Inter-company transfers cash (G).
- Subtract the amount from the Cash History printed for customer #’s 1-99 from the sum on 2.a. (C or F) above. Notate this sum (H). C or F minus G=H.
- This amount (H) should equal the DEPOSITED (I) amount from the Check Account report.
- Using the DEPOSITED (I) amount on the Check Account report compared to the figure from (H).:
  - If they equal, the A/R side is correct. Continue down this document to Step 2: A/P Side.
  - If they don’t equal, determine the difference. As an example, let’s say the difference is $5,000.00.
  - If the Checking Account report has $5,000.00 more, it means a deposit went into the checking account but it didn’t go into A/R, or it could be the A/R amount is higher meaning a deposit went to A/R but is not on the Check Account report. In any case, if the amount is not visible just by looking at the deposits on the Check Account report, you will have to check each day one at a time.
    - To check each day, go to A/R, Cash/Receipts history (Task 20), Print Selected History Records (Sub-task 4), changing field # 5 to PRE (print preview), (For multiple divisions, the starting customer # is 100, & ending customer # is 99999).
      - Please enter – starting batch number: ALL
      - Please enter – starting G/L account number: ALL
      - Please enter – starting transaction type: ALL
      - Print report by: 2). Customer number/document date/division number
      - Please enter
        
        starting customer number: 100
        
        ending customer number: 99999
      - Please enter – starting document date: 08/01/xx
        
        ending document date: 08/01/xx
        
        Please enter – starting division number: ALL
        
        Suppress detail records? (YES/NO): YES
    - When the report appears on the screen, enter an L for LAST screen. Notate the “Total Cash Received”. Then back out to the main menu.
      - Each month after balancing the checking account in A/P (Task 20) the cleared deposits and checks are erased. Take the report from when you reconciled to the bank statement. Add up the deposits dated 08/01/xx.
      - The total of the deposits should be the same as the “Total Cash Received” from 4.c.i. above.
      - Continue this process, printing the Cash History report, one day at a time, & adding up the deposits for that same day from the Checking Account report until the discrepancy is found.
Let’s say the discrepancy is a check from one customer for a deposit on a job. The check was deposited into the bank account and entered into A/P Task 20 Check account as a deposit, but was never put onto the customer’s A/R account.
- Make sure the check didn’t get entered into the A/R customer’s account before or after the month you are working on (i.e. August). If it never was entered, you will have to enter it into A/R Cash/Receipts Entry & Editing (Task 2) with a current date (not August since August is already balanced & closed), apply it correctly and also put it on the A/R daily balancing spreadsheet.
- A manual journal entry will have to be made for the month of August. In this case it would be a debit to cash & credit to A/R. This journal entry will need to be reversed in the current month (remember: the manual entry is made in the month of the error).
- Each day a discrepancy is found determine what happened. If it affects a customer account, does an entry need to be made into A/R Cash/Receipts Entry & Editing (Task 2) to correct the customer account? (If so, it needs to be made with a current date. The month you are balancing the A/R for is already closed so you can’t make the A/R cash entry using the old date.) If it doesn’t affect a customer’s account, then nothing will need to be entered into A/R Cash/Receipts entry. But either way a manual journal entry will need to be made. Make note if the manual journal entry will need to be reversed or not.

STEP 2 A/P SIDE

Go back to the A/P to G/L Interface report from the month being balanced. You may go to the summary section.
- Highlight all the lines with the 102-00-01. The SOURCE column will say PRE PAID AND REGULAR CHECKS. If more than one amount, total them on a calculator.
- If there are any debits (A) subtract the debits (A) from the credits (B). Notate this sum(C). A=ACCT.102-00-01 (DEBITS), B=ACCT. 102-00-01 (CREDITS), B-A=z
Go to the G/L Trial Balance (Task 9 in the G/L Module) and print for the cash account (i.e. 102-00-01). Under the column “SOURCE” for A/P and under the column “TRX REFERENCE” for AUTOMATIC INTERFACE TO G/L.
- Highlight these debits(D) & credits(E). If more than one amount total them on a calculator. If any debits (D) subtract the debits from the credits (E). Notate this sum (F). This sum should be the same as the sum from 1.b.above. E-D=F F=C
Go into A/P, Voucher History (Task 19), Print Selected Records (Sub-task 4). Print a report for the month being balanced, i.e. August, 20xx, for vendor #1-99. The last page of this report will have “PAID ENTRIES WITHIN DATE RANGE PAID TOTAL (NET CHANGE TO CASH):”(G). This amount is the total of the inter-company transfers for the month. This amount needs to be subtracted from the sum notated above on 1.b& 2.a. Notate this new sum (H). C or F minus G=H
Look at the A/P Check Account report printed when you reconciled to the bank statement.
- On the report go to the totals page, the PAID OUT (I) amount is the total of the checks for the month.
- The OTHER PAID OUTS (J) is the amount of the different transaction types: 1 CC charge from bank, 2 Misc. charge from bank, 3 Bad check/CC & 8 Electronic Funds Transfer (EFT).
- Look at the individual EFT’s on the Check Account report. Look at the column for the APPL CODE, if the EFT has A/P in this column, it means it came from A/P and a voucher was posted for it. Total on a calculator just this type of A/P EFT’s (K).
- Add the total of these type of EFT’s (K) and the total PAID OUT (I). Notate this amount(L) .I+K=L
- With multiple divisions, L should equal H above. L=H
  - If it is off, go into the A/P module and print a report of the checks that went through A/P. Go to: Voucher History by Check (Task 14) and print for All checks, vendors 100 through 99999, for the month you are balancing.
  - Verify each check on this report against the Check Account report. Each check on the A/P Voucher History by Check (from step 3 above) should be on the Check Account report for the same amount. When finished verifying these two reports, everything on both reports should be check off.
    - If you find any differences, find out what happened. Did the check get posted with a wrong date or wrong amount? A manual journal entry will need to be made for any differences in the two reports.

STEP 3 MISCELLANEOUS TRANSACTIONS ON CHECK ACCOUNT REPORT

When balancing the check account to the bank statement, the bank statement might have had miscellaneous charges or additions that weren’t put through A/R or A/P. This could have been for a correction to a deposit, a charge for a bad check, or a credit card charge, etc…. These transactions would have had to been entered into the A/P Check Account (Task 20) in order to balance to the bank statement. In addition, a manual journal entry would need to be made for these charges.

Take the Check Account report for the month you are balancing and look at the miscellaneous transactions listed directly between the deposits and the checks.
The EFT’s that went through A/P should already be accounted for in STEP 2 above. Check those off on the Check Account report if not already checked off.
A manual journal entry should already be on the G/L Trial Balance for the rest of the miscellaneous transactions on the Check Account report.
1. Transaction types 1 CC CHG, 2 MSC CHG, 3 BAD CK/CC & 8 EFT’s are subtracted from the check account. The manual journal entry for any of these should be a credit to the checking account G/L account # and a debit to another appropriate G/L account #.
  1. If the Check Account report has any of these miscellaneous types check them off on the report and the G/L Trial Balance report. Make sure the G/L Trial Balance report they are a credit.
2. Transaction types 4 COL CK/CC & 5 LOST CK are added to the check account. The manual journal entry for any of these should be a debit to the checking account G/L account # and a credit to the appropriate G/L account #.
  1. If the Check Account report has any of these miscellaneous types check them off on the report and the G/L Trial Balance report. Make sure the G/L Trial Balance report they are a debit.
3. If you found any mistakes in these manual journal entries, a correcting manual journal entry will need to be made and posted.

If your payroll doesn’t come out of the same checking account everything on the Check Account report should be checked off. Also everything on the G/L Trial Balance report should be checked off or highlighted.

If you have a list of manual journal entries to post for corrections found while following this document post them now.

After the correcting manual journal entries are posted print a new G/L Trial Balance for the check account G/L account #. If the ending balance is still off to the CHECKBOOK BAL on the Check Account report, you will need to verify the previous month’s amounts balance. If the previous month is off follow these procedures for the previous month.

When finished everything on both reports, the Check Account report printed when reconciled to the bank statement and the G/L Trial Balance for the G/L account 102-00-01 should be checked off or highlighted.

Balancing G/L with Task 20 - Check Account - Multiple Divisions - No Payroll

STEP 3 MISCELLANEOUS TRANSACTIONS ON CHECK ACCOUNT REPORT