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New words in this lesson

Reconciliation

Checking the books against the bank statement line by line until the balances agree. Done every month for every bank and card account.

Outstanding check

A check you've written and recorded that the bank hasn't paid yet. A common reason the books and bank disagree.

Deposit in transit

Money you've recorded as deposited that the bank hasn't added to the account yet, usually because it was deposited at the end of the day or month. It clears by itself in a day or two.

Look up any other word in the glossary

Three reasons they differ

Your book balance for Checking and the bank's balance are rarely the same on a given day. There are three reasons:

Reason	Examples	What to do
Timing: the bank hasn't caught up	An (written, not cashed yet); a (recorded, not in the bank yet)	Nothing: it clears by itself
Missing from the books	A bank fee, interest, an autopay nobody recorded	Record it
A mistake	A wrong amount, a duplicate, the wrong account	Fix it

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