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Checkbook Simulation Activity

(9 of 10)

Checkbook Simulation Activity

It’s time to put recordkeeping into practice. Click on the link below to be taken to an activity where you will be given a "hypothetical" month of transactions to enter into a check register. This activity will provide you the opportunity to see your cash flow in action and understand the importance of having a monthly budget to follow.

CLICK HERE to get started with the checkbook register.

It is recommended that you print the instruction page (first tab), which includes all of the transactions you will enter into the check register (tab 2).

The document is an Excel file and will allow you to enter the transactions directly to it. Additionally, it will automatically calculate your account balance after each transaction.

If you are unable to use this activity using the electronic tool, print out a copy and enter the transactions manually and use a calculator to determine your balance after each transaction.

In the electronic version you will be provided with a bank statement that is created based on the transactions you enter. The statement will reflect your transactions based on the date the transaction actually clears your account—in other words, the date the funds are actually deducted. This will provide you with examples of how your checkbook register can show a balance different from that of your statement due to the timing of the transactions.

Once you have completed the exercise, return to this course to complete the short quiz below. The answers are at the bottom. You will need your completed check register and your bank statement to answer the quiz questions.

Once you are done with the exercise on your own, you can click here to check your work against a fully completed register.

Question 1: On what date does your account become overdrawn and what is the negative balance on that day?

a) 9/14; -$41

b) 9/13; -$127

c) 9/20; -$41

d) 9/17; -$127

Question 2: What happened once your account became overdrawn?

a) You were charged an overdraft fee of $35

b) Nothing

c) Your account balance dropped to -$76

d) You were charged an overdraft fee of $35 and your account balance dropped to -$76.

Question 3: The ________ of your cash flow, deposits and withdrawals is important to understand to help you alleviate overdrafts.

a) Amount

b) Timing

c) Date

d) Growth

Question 4: Why doesn’t your check register match your bank statement at the end of September?

a) You had an overdraft fee.

b) You don’t get paid again until 10/1.

c) The checks you wrote on 9/20 ($100) and 9/30 ($20) have not cleared/cashed yet.

d) All of the above


Question 1 Answer: 9/14; -$41. The $60 Auto Pay from Checking for the cell phone bill brought your balance to -$41.

Question 2 Answer: You were charged an overdraft fee of $35 and your account balance dropped to -$76. The overdraft fee of $35 dropped your balance to -$76.

Question 3 Answer: Timing. Your second paycheck of the month was deposited on 9/15. Being aware of the timing of your direct deposit can help you monitor your spending in the first half of the month so you don’t overspend and become overdrawn.

Question 4 Answer: The checks you wrote on 9/20 ($100) and 9/30 ($20) have not cleared/cashed yet. Checks not yet cashed are referred to as outstanding checks. The bank is not aware of the checks you write until they have been cashed. When they are cashed they will be forwarded to the bank for processing. Once processed, they will show up as withdrawals online and on your bank statement.