ANTMACK215 × WEALTHWISEGUYS
WealthWiseGuys Practical Mathematics

Chapter 4

Banking

Checking accounts, bank reconciliation, and online and mobile banking

A checking account is where most people's money lives day to day. This chapter shows how to write checks, keep a register, reconcile your records with the bank statement, and use online and mobile banking safely. All names, banks, and account numbers are fictional.

4.1

The Checking Account: Deposits, Checks, and the Register

Learning objectives

After this section you will be able to:

  1. Identify the parts of a check and write the amount in words.
  2. Complete a deposit slip.
  3. Keep a running balance in a check register.

Real-life situation

Tyrell's first apartment

Tyrell opened a checking account when he moved into a shared apartment. He gets paid by direct deposit, pays his rent share and gym by check, and uses his debit card for transit.

Tyrell M. Brooks
Philadelphia, PANo. 1043
Date: October 8, 2026
PAY TO THE ORDER OF$45.00Philly Fitness Gym
Forty-five and 00/100 ———————— DOLLARS
MEMO October membershipTyrell M. Brooks

⑆000000000⑆ 0000000000⑈ 1043

Figure 4.1 A completed personal check (fictional)

The concept

A check is a written order telling your bank to pay someone from your account. You are the drawer, the person or business you pay is the payee, and the bank is the drawee.

Write the amount twice: in numbers in the box, and in words on the line, with cents written as a fraction over 100. If they disagree, the bank generally uses the words. Draw a line after the words so nobody can add to them.

A check register is your own record. Every deposit is added and every check, debit card purchase, withdrawal, or fee is subtracted, keeping a running balance.

To deposit a check, the payee endorses it on the back. A blank endorsement (just a signature) lets anyone cash it. A restrictive endorsement, "For deposit only," is safer.

DateNo.DescriptionPayment (−)Deposit (+)Balance
Balance forward$820.00
10/1DDPaycheck (direct deposit)$612.50$1,432.50
10/31041Rent share$650.00$782.50
10/5DEBSEPTA Key reload$25.50$757.00
10/81043Philly Fitness Gym$45.00$712.00
Figure 4.2 Tyrell's check register, October

The Checking Account: Deposits, Checks, and the Register: solution map

  1. 1

    Identify the question

    Find each running balance in Tyrell's register (Figure 4.2).

  2. 2

    Calculation 1

    Start $820.00.

  3. 3

    Calculation 2

    10/1 deposit 612.50: 820.00 + 612.50 = 1,432.50.

  4. 4

    Calculation 3

    10/3 check #1041, 650.00: 1,432.50 − 650.00 = 782.50.

  5. 5

    Calculation 4

    10/5 debit SEPTA Key, 25.50: 782.50 − 25.50 = 757.00.

  6. 6

    Calculation 5

    10/8 check #1043, 45.00: 757.00 − 45.00 = 712.00.

  7. 7

    Interpret and check

    Ending balance $712.00

Figure 4.1.V The Checking Account: Deposits, Checks, and the Register: solution map. Hypothetical teaching data.

Money Words

Plain-language words you will use in this lesson — learn them before we reach the formulas.

  • checking account

    A bank account for everyday spending, usually with a debit card and checks.

  • savings account

    A bank account meant to hold money for later, often earning a small amount of interest.

  • deposit

    Money placed into a bank account.

Key terms

Checking account
A bank account for everyday deposits and payments.
Drawer / payee / drawee
The account owner writing the check / who is paid / the bank paying it.
Deposit slip
A form listing cash and checks you are depositing.
Endorsement
The payee's signature on the back of a check, sometimes with instructions.
Check register
Your running log of deposits, payments, and balance.

Formulas & rules

  • Running balance

    New balance = Previous balance + Deposits − Payments

  • Net deposit

    Cash + Coins + Checks − Cash received

Worked examples

Example 1Keeping the register

Find each running balance in Tyrell's register (Figure 4.2).

Solution

  1. 1Start $820.00.
  2. 210/1 deposit 612.50: 820.00 + 612.50 = 1,432.50.
  3. 310/3 check #1041, 650.00: 1,432.50 − 650.00 = 782.50.
  4. 410/5 debit SEPTA Key, 25.50: 782.50 − 25.50 = 757.00.
  5. 510/8 check #1043, 45.00: 757.00 − 45.00 = 712.00.

Answer: Ending balance $712.00

Example 2Writing an amount in words

Write $1,208.07 as it appears on a check.

Solution

  1. 1Dollars in words: one thousand two hundred eight.
  2. 2Cents over 100: 07/100.

Answer: One thousand two hundred eight and 07/100 dollars

Practice exercises 4.1

  1. Start with $300.00, deposit $125.40, then write a check for $89.99. What is the balance?
  2. Write $63.50 in words as on a check.
  3. On check #1043, who is the payee and who is the drawer?
  4. Deposit slip: currency $140.00, coins $3.25, checks $210.00 and $56.30, less cash received $50.00. What is the net deposit?
  5. Why is "For deposit only" safer than a plain signature?

Recap quiz 4.1

1. In a register, a deposit:
2. "For deposit only" is a:
3. The payee is:

Section 4.1 recap

  • The register is a running record: deposits add, payments subtract.
  • Record checks and card payments as soon as they happen.
Answer key with explanations: Section 4.1

Practice exercises

  1. $335.41
  2. Sixty-three and 50/100 dollars
  3. Payee: Philly Fitness Gym. Drawer: Tyrell M. Brooks
  4. 140 + 3.25 + 210 + 56.30 − 50 = $359.55
  5. It is a restrictive endorsement, so the check can only be deposited into the payee's account, not cashed by someone who finds it

Recap quiz

  1. Increases the balance: Deposits are added.
  2. Restrictive endorsement: It restricts what can be done with the check.
  3. The person or business being paid: The payee receives the money.
4.2

Bank Statements and Reconciliation

Learning objectives

After this section you will be able to:

  1. Read a monthly bank statement.
  2. Identify deposits in transit, outstanding checks, fees, and credits.
  3. Reconcile the checkbook balance with the bank statement balance.

Real-life situation

The numbers don't match

Tyrell's November statement says $1,186.40. His register says $1,240.15. Neither is wrong yet: some items have reached one record but not the other.

Bank side

Statement balance$1,186.40
+ Deposit in transit$250.00
− Outstanding #1044$75.00
− Outstanding #1046$132.15
Adjusted bank$1,229.25

Checkbook side

Checkbook balance$1,240.15
+ Interest earned$1.10
− Monthly service fee$12.00
Adjusted checkbook$1,229.25

Balanced ✓

Figure 4.3 Bank reconciliation worksheet

The concept

A bank statement lists everything the bank processed during the month. Your register lists everything you recorded. The two balances differ because of timing and because the bank may have items you did not know about.

On the bank side: add deposits in transit (you made them, the bank had not posted them by statement date) and subtract outstanding checks (you wrote them, they had not cleared).

On the checkbook side: add credits you did not record, such as interest, and subtract fees and NSF (returned) checks you did not record.

If the two adjusted balances are equal, the account is reconciled. If they are off by an amount divisible by 9, look for transposed digits, such as writing 54 instead of 45.

Bank Statements and Reconciliation: solution map

  1. 1

    Identify the question

    Use Figure 4.3.

  2. 2

    Calculation 1

    Bank: 1,186.40 + 250.00 = 1,436.40.

  3. 3

    Calculation 2

    Outstanding: 75.00 + 132.15 = 207.15. 1,436.40 − 207.15 = 1,229.25.

  4. 4

    Calculation 3

    Checkbook: 1,240.15 − 12.00 + 1.10 = 1,229.25.

  5. 5

    Calculation 4

    Both adjusted balances are $1,229.25. Reconciled. Tyrell records the fee and interest in his register.

  6. 6

    Interpret and check

    Both adjusted balances: $1,229.25

Figure 4.2.V Bank Statements and Reconciliation: solution map. Hypothetical teaching data.

Money Words

Plain-language words you will use in this lesson — learn them before we reach the formulas.

  • withdrawal

    Money taken out of a bank account.

  • balance

    The amount of money in an account at a given moment.

  • account statement

    A bank's record of deposits, withdrawals, fees, and the balance for a period of time.

Key terms

Bank statement
The bank's monthly record of your account activity.
Deposit in transit
A deposit you recorded that the bank had not yet posted.
Outstanding check
A check you wrote that has not yet cleared the bank.
Service charge
A fee the bank deducts for account services.
NSF check
Non-sufficient funds: a deposited check that bounced and was taken back out.
Reconciliation
Adjusting both balances until they agree.

Formulas & rules

  • Adjusted bank balance

    Statement balance + Deposits in transit − Outstanding checks

  • Adjusted checkbook balance

    Checkbook balance + Credits − Fees − NSF items

Worked examples

Example 1Reconciling Tyrell's account

Use Figure 4.3.

Solution

  1. 1Bank: 1,186.40 + 250.00 = 1,436.40.
  2. 2Outstanding: 75.00 + 132.15 = 207.15. 1,436.40 − 207.15 = 1,229.25.
  3. 3Checkbook: 1,240.15 − 12.00 + 1.10 = 1,229.25.
  4. 4Both adjusted balances are $1,229.25. Reconciled. Tyrell records the fee and interest in his register.

Answer: Both adjusted balances: $1,229.25

Example 2A bounced check

Statement $540.00; outstanding check $60.00; checkbook $525.00. A $35.00 check Tyrell deposited bounced (NSF) and the bank charged a $10.00 returned-item fee.

Solution

  1. 1Bank: 540.00 − 60.00 = 480.00.
  2. 2Checkbook: 525.00 − 35.00 − 10.00 = 480.00.

Answer: Reconciled at $480.00

Practice exercises 4.2

  1. Statement $932.10, deposit in transit $100.00, outstanding checks $45.60 and $18.90. Adjusted bank balance?
  2. Checkbook $702.35, service fee $8.50, interest $0.42. Adjusted checkbook balance?
  3. Is an outstanding check added or subtracted, and on which side?
  4. You recorded a check as $72.00 but it cleared for $27.00. How should you fix the register?
  5. Your balances differ by $18. What error might you look for?

Recap quiz 4.2

1. A deposit in transit is:
2. A monthly service fee is:
3. You are reconciled when:

Section 4.2 recap

  • Reconciliation makes the bank's balance and your checkbook agree by accounting for what has not cleared yet.
  • Deposits in transit add to the bank balance; outstanding checks subtract.
Answer key with explanations: Section 4.2

Practice exercises

  1. 932.10 + 100 − 64.50 = $967.60
  2. $694.27
  3. Subtracted from the bank statement balance
  4. Add $45.00 back to the register balance
  5. 18 is divisible by 9, so look for transposed digits (for example 31 written as 13)

Recap quiz

  1. Added to the bank balance: The bank has not counted it yet.
  2. Subtracted from the checkbook: You did not know about it, so your register must catch up.
  3. Both adjusted balances are equal: Agreement of the adjusted balances is the goal.
4.3

Online and Mobile Banking

Learning objectives

After this section you will be able to:

  1. Tell the difference between current and available balance.
  2. Use mobile check deposit and transfers correctly.
  3. Avoid overdrafts and protect your account from scams.

Real-life situation

Checking the app before buying sneakers

Nia opens her bank app. It shows a current balance and a smaller available balance, plus two pending purchases from the weekend.

Liberty City Bank

Available balance

$369.36

Current balance $418.60

Pending

Food delivery−$36.25
Music subscription−$12.99
DepositTransferAlerts

Mobile deposits: endorse "For mobile deposit only at Liberty City Bank".

Figure 4.4 Mobile banking screen (fictional bank)

The concept

Current balance is what has fully posted. Available balance is what you can spend right now: current balance minus pending debits and holds. Spend based on available, and on what your register says is still coming.

Mobile check deposit: photograph the front and back after endorsing with your signature and the words your bank requires. Banks may make only part of the deposit available right away. Keep the paper check until the deposit fully clears.

Direct deposit and transfers move money electronically. Person-to-person (P2P) payments are usually instant and hard to reverse, so only send money to people you know.

An overdraft happens when you spend more than is available. Banks may charge a fee or decline the purchase. Low-balance alerts help. Never share a one-time passcode: your real bank will not text or call asking for it.

Online and Mobile Banking: solution map

  1. 1

    Identify the question

    Use Figure 4.4.

  2. 2

    Calculation 1

    Pending: 36.25 + 12.99 = 49.24.

  3. 3

    Calculation 2

    Available: 418.60 − 49.24 = 369.36.

  4. 4

    Interpret and check

    $369.36

Figure 4.3.V Online and Mobile Banking: solution map. Hypothetical teaching data.

Money Words

Plain-language words you will use in this lesson — learn them before we reach the formulas.

  • bank reconciliation

    Comparing your own record of an account with the bank's statement and explaining any differences.

  • outstanding check

    A check you wrote that the recipient has not cashed yet.

  • overdraft

    Spending more than the balance in an account, which may trigger fees.

Key terms

Current balance
Money in the account from fully posted transactions.
Pending transaction
A purchase or deposit authorized but not yet posted.
Available balance
What you can spend now after pending items and holds.
Direct deposit
Pay sent electronically from an employer into your account.
Overdraft
Spending more than the available balance.
Two-factor authentication (2FA)
A second check, such as a texted code, to prove it is you.

Formulas & rules

  • Available balance

    Available = Current − Pending debits − Holds

  • Overdraft result

    New balance = Available − Purchase − Fee

Worked examples

Example 1Nia's available balance

Use Figure 4.4.

Solution

  1. 1Pending: 36.25 + 12.99 = 49.24.
  2. 2Available: 418.60 − 49.24 = 369.36.

Answer: $369.36

Example 2The cost of an overdraft

Nia's available balance is $40.00. She buys a $55.00 hoodie and her bank charges a $35.00 overdraft fee.

Solution

  1. 140.00 − 55.00 = −15.00.
  2. 2−15.00 − 35.00 = −50.00.
  3. 3A $55 hoodie effectively cost $90.

Answer: Balance −$50.00

Practice exercises 4.3

  1. Current balance $1,050.00, pending debits $220.45. Available balance?
  2. You mobile-deposit a $300 check. The bank makes $225 available today. How much is still on hold?
  3. You get a text: "Your account is locked. Reply with the code we just sent." What should you do?
  4. Direct deposit of $846.20 twice a month. Monthly total?
  5. Balance $20.00, purchase $48.00, overdraft fee $35.00. New balance?

Recap quiz 4.3

1. Your bank's code arrives by text. Who should you share it with?
2. Available balance is lower than current balance because of:
3. Before a mobile deposit, you should:

Section 4.3 recap

  • Available balance = current balance minus pending debits and holds.
  • Review your account often — alerts and pending items prevent overdrafts.
Answer key with explanations: Section 4.3

Practice exercises

  1. $829.55
  2. $75
  3. Do not reply or share the code. Contact the bank through its official app or the number on your card
  4. $1,692.40
  5. −$63.00

Recap quiz

  1. No one: One-time codes are for you alone.
  2. Pending transactions and holds: Pending items reduce what you can spend.
  3. Endorse it as the bank requires: An endorsement is required, and keep the check until it clears.

Chapter 4 Organizer and Review

Chapter Organizer

Every section at a glance: key formulas, key terms, and the main idea.

  • 4.1 The Checking Account: Deposits, Checks, and the Register

    Key formulas

    • Running balance: New balance = Previous balance + Deposits − Payments
    • Net deposit: Cash + Coins + Checks − Cash received

    Key terms

    Checking account, Drawer / payee / drawee, Deposit slip, Endorsement, Check register

    Remember

    The register is a running record: deposits add, payments subtract.

  • 4.2 Bank Statements and Reconciliation

    Key formulas

    • Adjusted bank balance: Statement balance + Deposits in transit − Outstanding checks
    • Adjusted checkbook balance: Checkbook balance + Credits − Fees − NSF items

    Key terms

    Bank statement, Deposit in transit, Outstanding check, Service charge, NSF check, Reconciliation

    Remember

    Reconciliation makes the bank's balance and your checkbook agree by accounting for what has not cleared yet.

  • 4.3 Online and Mobile Banking

    Key formulas

    • Available balance: Available = Current − Pending debits − Holds
    • Overdraft result: New balance = Available − Purchase − Fee

    Key terms

    Current balance, Pending transaction, Available balance, Direct deposit, Overdraft, Two-factor authentication (2FA)

    Remember

    Available balance = current balance minus pending debits and holds.

Cumulative Review

Mixed practice from this chapter and the two chapters before it.

  1. Section 4.1

    Why is "For deposit only" safer than a plain signature?

    Show answer

    It is a restrictive endorsement, so the check can only be deposited into the payee's account, not cashed by someone who finds it

  2. Section 4.2

    Your balances differ by $18. What error might you look for?

    Show answer

    18 is divisible by 9, so look for transposed digits (for example 31 written as 13)

  3. Section 4.3

    Balance $20.00, purchase $48.00, overdraft fee $35.00. New balance?

    Show answer

    −$63.00

  4. Review of Section 2.3

    2/3 × 9/10

    Show answer

    18/30 = 3/5

  5. Review of Section 3.4

    Write 8.5% as a decimal.

    Show answer

    0.085

All prices, stores, people, and accounts in this chapter are hypothetical and for teaching only. Product references are generic categories; no brand endorses or is endorsed by this textbook.

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