Reconciling bank accounts

[DTS]

I am trying to reconcile a client's bank statements back to '03. He paid some of the bills in out of pocket cash and were recorded as cash payments, but payment was never reimbursed to him.

What is the proper way to record this on the books? DR: expense CR: owner's capital contribution? I'm trying to get the negative cash off the b/s.

Thanks,

Dennis

[mwarney]

What is the proper way to record this on the books? DR: expense CR: owner's capital contribution?

That's what I would do.

[thomtax]

I agree with mwarney and you.

[ChEAr$]

It depends

I am trying to reconcile a client's bank statements back to '03. He paid some of the bills in out of pocket cash and were recorded as cash payments, but payment was never reimbursed to him.

What is the proper way to record this on the books? DR: expense CR: owner's capital contribution? I'm trying to get the negative cash off the b/s.

Thanks,

Dennis

On what type of business? schedule c? corporation? other?
for schedule c, why worry about bank rec?

[thomtax]

for schedule c, why worry about bank rec?

Good point, unless they are trying to do the bookkeeping for the company.


LT

[DTS]

It is

Sch. C.

I am doing the bookkeeping. I feel it should be done to show accuracy in the books. I maybe too picky, but I do not like loose ends like this.

Dennis

[ChEAr$]

draw the line

Sch. C.

I am doing the bookkeeping. I feel it should be done to show accuracy in the books. I maybe too picky, but I do not like loose ends like this.

Dennis

It certainly doesn't hurt to reconcile bank statements for some years back, but I think that
anything more than a year is not needed and certainly not for tax purposes as long as you
verify the validity of expenses and income. Saves client money, too! And point that out
to client.

[DTS]

Statements

Harlan,

Thank you for the good advice.

I will be reconciling each month from now on and I need to reconcile the past to do this. I am doing to do a quick adjustment each year and then do one reconcile for each year. It won't be too much and won't take but a few minutes once the adjustment is in place.

Thanks, again!

Dennis

[JAinNC]

Doing it the right way

I agree, Dennis. We get clients from other firms that have poor bookkeeping. At least the reports should look normal.