How do you balance a checkbook?

Definition of Balance a Checkbook

To balance a company checkbook means comparing the amounts on the bank statement (or other bank account detail) to the amount in the company's checkbook, check register, and the related general ledger account and arriving at the same correct balance in both records.

This process is referred to as preparing a bank reconciliation which will include two lists:

  • A list of adjustments to be made to the company's records. The adjustments could be errors in the company's records and/or items that are properly in the bank's records but are not yet in the company's records.
  • A list of adjustments that are needed to the bank's records. Common examples are the company's outstanding checks and deposits in transit which are in the company's records but are not in the bank's records.

After the items in the above lists of adjustments are considered, the adjusted checking account balance in the bank's records should agree to the adjusted checking account balance in the company's records.

Example of Balancing a Checkbook

For a thorough discussion and example of balancing a checkbook see our major topic Bank Reconciliation and our Bank Reconciliation business forms referenced below.