In this presentation, we will do a bank reconciliation for our problem where we have been tracking deductions related to personal deductions on our business account using an equity type method within QuickBooks. Here we are on the homepage, we currently have the open windows open. In order to open the open windows, you go to the View, drop down and select the open windows list. We have now going through to our bank statement, we've entered our data for the bank statement for the month of march into our system. We've added some items, the only difference being that we have now added some items that are typically personal related more of them, but items we want to track on our system in an equity format. And now we're just going to reconcile our bank statement only difference being that we have a few more items here to reconcile but there's still items we put into our checking account and therefore shouldn't causes too many problems or any problems with us going through the reconciliation.
Process. So that's what we'll do now. And it's going to be similar to any kind of reconciliation. We're on kind of more of a cash basis system here because we entered this data directly into the system. So we should be able to find this information pretty quickly, we're going to have to add a few more items as we reconcile, want to point that out, because that's important to reconcile no matter what system we use, the reconciliation process will give us some more assurance. So we're going to go to QuickBooks, and we're going to go to the banking and reconcile banking and reconcile.
We're going to reconcile As of March, that's when we entered the data, the beginning balance is 40,000 209. That needs to be the case, the beginning balance has to match. If it doesn't, then you know you're going to want to we got to do something in order to make the beginning balance match. We could discuss that at a later time. But for now, we're going to assume that everything is going forward with the bank reconciliation. Prior balance is okay.
We don't have to do anything. To make that work, we're going to enter the Indian balance, which is the 40 3046. So I'm going to go back over here and say 40 3046 is going to be our ending balance, I'm not going to enter anything for service or interest, because I typically think it's easier just to integrate directly into the system, especially if we're using a system like this a cash based system. So I don't typically use these items, and will enter them directly if necessary, into the check register. So then we're going to go continue. And then we'll just take and tie this information off just like we had before.
And now we haven't entered the deposits, we're going to have to add those. So we'll go and take and tie everything that we have so far. And then we'll go back and make any adjustments we need to ensure this up just as we would in practice. So we're going to go remember we want to typically go from the bank statement back to the books, that's how we typically want to think of it. So we've got 520 we want to go back to the books 522 21 and then we found that one, so I'm going to highlight it, there's the 520 on the 1021. I'm not going to go through this fairly quickly because this isn't a course on the bank reconciliation.
But I just want to show that this doesn't hurt the bank reconciliation process. And we still want to do it. So then we got the 98. So the 98 is going to be this item. For that one, we found that right click highlight everything, we're going to look for both of them the 250 and the 65. So here's the 250, and the 65.
They should all be in there exactly the same because we entered them directly from the bank statement. So we're good there. So those are going to be those two items. And then we have the 320 and the 900. So here's the 320 and the 900. We could match again the check numbers here and even the dates the way because we're entering them directly from the bank statement on a more of a cash basis under the system.
We've been putting this in place under The 100 to 5100. So there's the 100 to 5100. Going back over, we found those two. And then we want the 125, the 1500, there's the 125, the 1500, there are those two. So we're good on those, right click highlight, there's the 14 and the 598. So here's the 410, the 598.
So we'll go back and we'll say we found those two. So we should be good there, the 500 and the 195, the 500, that 195. So there are these two, and then we've got this 37, the 1000. There's 37. And the 1000. Looks like we're missing that one.
So that's when we miss. So there's the 37. And that's why we do the bank reconciliation. So we're going to highlight and we're going to add the 1000. Now that's going to eat trade, and that's going to be an IRA Type accounts. So we're saying that this looks like another item that we're not going to be putting into the books as a expense item, but we want to put it on as a draw.
So I'm going to add this. And this is going to be one, that if it was like a retirement plan, and it's not something that's going to be under the business as a sole proprietor, but when we put into a normal IRA outside of the business, but we still think it's, of course, something that could be affecting our taxes. So let's put that into our check register, just like we would for any type of item, we would find whether it be business related or not, we're going to have to enter it into the system, because of course it came out of our checking account. So we're going to go back over here, we're going to go to the checking. I'm going to go to the register now thanking us register. And we're going to say that the date of this transaction was on the 23rd.
So it's going to be a trade was on Oh 320 119 the check number four That one was 1040 might be a duplicates, I can but and then it was for each raid which we don't have again. So it's e trade. And I'm going to say that this is an IRA type account. Actually type that in IRA probably. So e trade is a type of company that we could set up an IRA with kinda like a bank that we could do online and set up an IRA, which means putting money into stocks and bonds for an investment. And that typically could be something that could affect our taxes, but possibly not something in our example here that's going to be deduction for the business taxes.
So I'm going to say okay, set that up, quick add vendor, and we're going to say this is 1000. And then the other account, it can't be an expense account. This is another item that we took out of our checking account, but we want to track it somewhere in the equity section. So we're going to make an equity account for it. And we can call it retirement plan or just IRA. They call it draws For an IRA, so that's going to be our account.
And that's going to go up here, it's going to be within the equity type of account. So we're going to say tab, I'm going to set it up. And it's not going to be an expense, it's going to be an equity type of account. So we're gonna go into equity. And I'm going to make it a sub account now, because that's what we've been doing with these accounts, a sub account of owner's draws. So it's a draws type of account.
And we're going to put it into a sub account and save and close and record. So just to see what that does to our financials, if we go back to the reports up top company and financial balance sheet, then we're going to say the date customize a 10119 to 1230 119. January through December 2019. And okay, scroll down and now we've got it A new item here that we need to pick up related to the IRA. These two look the same here, but they are different. Here's the IRA account that we set up.
And if I close this back out, there's other 1000 is actually two transactions that happen. That college funds. Okay, so we'll close that back out, back to our reconciliation, then we're going to say, Now we found that one, so that one's good. So whether it be a personal expense of business or not, we still need to do the reconciliation and we could still find these and reconcile them in the same format we would. So if we go back, we're going to say okay, that one we found that one highlighted and then the next one is 346 and 3539 346 3539. There are these two and then we have the 630.
So here's the 630. That's this one. Now we haven't entered the draws We haven't entered these two other items. This is a withdrawal that we're saying was just taken out of the company. And these are the bank service charges. So we need to enter those two.
And we need to enter these three deposits, which haven't been put in place as well. I'm assuming the date here should be March 3. So let's let's this should be March. So let's go ahead and enter that information. So we're going to go back to our QuickBooks file, we're going to go into the checking account. And then we had these withdrawals here and this was as of the end of the month, so it was the old 3031 190 330 119 the end of the month, and we're entering this withdrawal for 300.
So I'm just gonna call this not a check, but draw and I'm just gonna put it was 300. And I don't know where it went. I don't know it just money was taken out. So it might be business related. Or it might be just draws. And I'm thinking that if money was taken out, just cash was taken out that it was probably a draw.
Not one of these draws. But just a draw that we took out for personal use, I kind of more of a normal trust type of draw that we took out for personal use, that would be the assumption, don't know for sure, because just cash was taken out. But that's what we're gonna assume here on the draws, and say, Okay, and then the next item was a service charge. So I'm going to say this is like other it's not a check numbers is no check number. And we could put the bank whatever the bank is that I'm going to skip the vendor, and the service charge was for 150. So there's the 150.
I'm going to put this to the bank service charge that is an expense, that's a normal type of business expense. So we're going to say okay, record that. And then if I go back to the reconciliation, open windows and crickets tuition, we now have the 300 and the 150. So there's the 300, and the 150. So we find these two, highlight. Those are 301 50.
Now these are in the next month, we're not going to deal with those, we need the deposits. Now we're off by 19 520, which, of course, is this 19 520, the three deposits. So we'll just record these, assuming this should be in March. So we're called back over here. And say, go back to our checking account. And this is going to be Oh 30519.
This is a deposit now. I'm on the deposit side 5300 and we assume this is income. So under our method, I'm going to say the deposits are all income. So I'm going to call it sales, and Enter. And then there was another one on 315 for 4008. So welfare, okay, this is on 315 deposit, Rhonda, deposit that side for 800.
This is going to be income, which I think is sales, so sales income type account. Okay, and then the last one was on 225 9420. So we're going to say all right to 25 deposit. And that's going to be 49420. And we're going to say and again, this is kind of a cash method which is generated directly from the bank statements, so we don't know exactly which customer paid us sales. And there we have it.
If we go to the reconciliation, then we're going to say there's the three the 5348 the 9420. Going back to our account, now we found these three we should be able to highlight them That. And we should be in balance now. So if we go down, we are in balance. So we're good to reconcile, we're going to go ahead and reconcile. And that'll be our reconciliation.
If we look at the the two reports, and display those reports. Here's the bank reconciliation. It does. It's not, it's not going to give us any outstanding items, because we're doing this on a cash basis. But notice, it did help us to catch some things that we didn't input properly straight from the bank statement. So it's still necessary to do the bank reconciliation, you really want to do it, it's really easy to do it should be if we enter the data directly from the bank statement.
Here's the detailed information. Again, it looks like a lot of information. But really the accounts to reconcile these are all items that have cleared so there's not any difference between what is uncleared so I'm going to not spend a lot of time on that. I'm gonna close this back out and then go back to the balance sheet. And say, okay, and we made that one adjustment here. So remember that we can use the bank reconciliation to adjust either item, whether it be an expense item or one that we set up as a draws.
And if we go to the reports and company financial and the profit and loss and say, Oh 10119 to 1230 119, we can say okay, now we recorded our sales properly, we can have some confidence about these reports being done properly, at least having all the information that went through our checking account, reported, everything that went through that is business related, is reported in the profit loss here. Things that we want to track that are not business related, but we still want to track timing for we put on the balance sheet using these drawers accounts.