Banking and Reconciliation

Preview · ~54 min read · from QuickBooks Online Step-by-Step

# Banking and Reconciliation Summary After reading this chapter, you will be able to connect your bank and credit card accounts to QuickBooks Online, review and categorize downloaded transactions using the Bank Transactions feed, and reconcile your accounts to ensure accuracy. You'll learn to use key features like the Bank Transactions feed for automated data entry, customizable rules to streamline transaction processing, and the Review Signals system (green checkmarks, blue info indicators, and orange alerts) that shows QuickBooks Online's confidence level in transaction categorizations. The chapter also covers how to match downloaded transactions to existing entries in your registers, identify and resolve errors during reconciliation, and avoid common mistakes like duplicating income entries.

In this chapter

• The Bank Transactions Feed
• Opening the Sample File
• Connecting Your Bank and Credit Cards
• The Bank Transactions Interface
• Using the Bank Transactions feed for Data Entry
• Suggestions
• Uncategorized Transactions
• Splitting a Transaction
• The Posted Tab
• Purchasing Products
• Entering Transfers
• Using Find Other Matches
• Batch Actions
• Excluding Transactions
• Matching Credit Card Payments
• Customizing the Bank Transactions Feed
• Creating Rules
• Viewing the Bank Register
• How NOT to use the Bank Transactions feed
• Importing Transactions Downloaded from Your Bank
• Reconciling Bank Accounts
• Part 1: Setting Up the Statement
• Part 2: Getting the Difference to $0.00
• Part 3: If the Difference Still Is Not Zero
• Part 4: Analyzing the Remaining Transactions
• Finding Errors During Bank Reconciliation
• Bank Reconciliation Reports
• Reconciling Credit Cards
• Do It Yourself

Chapter review: Bank Transactions feed & reconciliation

13 practice questions. The answers are in the book.

1. When the Beginning Balance field in the Reconcile window doesn't match the beginning balance on the bank statement, you should:

   • Call the bank.
   • Repeat the most recent reconciliation to see if the missing transactions are waiting to be re-reconciled to $0.
   • Click the We Can Help You Fix It link.
   • Both b and c.

2. Which statement is false?

   • You can enter bank service charges using Enter Statement Charges.
   • You can sometimes enter bank service charges on the Reconcile window.
   • Bank service charges may come in through the Bank Transactions feed.
   • You can enter bank service charges using an Expense before you start your reconciliation.

3. To properly void an uncashed lost check from a closed accounting period:

   • Void the check in the register.
   • Delete the check.
   • Make a deposit in the current period for the same amount, and code it to the same account as the original check you want to void. Then mark both transactions as cleared in the Reconcile window.
   • Leave it in the register to remind you it was never cashed.

4. Which of the following columns cannot be displayed in the Reconcile window?

   • Ref No..
   • Class.
   • Date.
   • Payee.

5. You know you have reconciled your bank account correctly when:

   • You make a Reconciliation Discrepancy entry.
   • The Difference field shows 0.00 and there are no unexplained entries left on the list.
   • You have marked off all the transactions on the bank statement, even if there are others remaining.
   • All of the above.

6. The Reconciliation Report shows:

   • The Beginning Balance shown on the Bank Statement.
   • All the transactions on the statement for the month.
   • The actual Register Balance as of the reconciliation date.
   • All of the above.

7. What accounts should be reconciled?

   • Most Balance Sheet accounts.
   • Any account that receives regular statements.
   • Any bank, income or expense account.
   • Only bank accounts can be reconciled.

8. You should connect which accounts to the Bank Transactions feed?

   • Business checking and savings accounts.
   • Business credit cards.
   • Personal accounts if the owner commingles funds.
   • Both a and b.

9. All sales income in the Bank Transactions feed should:

   • Be entered by hand.
   • Be Excluded, since the sales receipts and invoice payments are already in the system.
   • Be ignored.
   • Match with Bank Deposits.

10. When you finish reconciling a credit card account and the confirmation box appears, it is a best practice to:

    • Click Pay All or a Portion of the Bill Now.
    • Click Enter a Bill to Pay Later.
    • Dismiss the confirmation box without taking further action.
    • Click Pay Down Credit Card right from this box.

11. In what account is a transaction created if you complete a reconciliation and your difference is not 0.00?

    • Opening Balance Equity.
    • Uncategorized Income.
    • Reconciliation Discrepancies.
    • Other Expense.

12. Your Net Income is vastly overstated. What could be causing the problem?

    • Deposits were added through the Bank Transactions feed instead of matched to existing sales transactions.
    • Transactions in the checking register that were left unreconciled.
    • Vendor checks still haven't been cashed.
    • Both a and b.

13. If the Bank Transactions feed shows an incorrect Payee or Category, you should:

    • Click on the transaction and enter the correct information.
    • Stop using it because something's wrong.
    • Add it as is - QuickBooks Online must know what it's doing.
    • Use Find Other Matches to update the information.