SAF Excel Ledger: Adjustment Entry Quick Reference

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1 ADJUSTMENTS An ADJUSTMENT entry is used for: Bank charges for products, such as new checks Bank fees for services, such as research or statement copies Bank account interest Bank fee for a returned check (insufficient funds, or NSF) adjusting a receipt/deposit the correction of an incorrect check entry from a previous month Depending on what is being adjusted, the code ADJ is entered where a Receipt number or a Check number is normally entered. ADJUSTMENT ENTRY EXAMPLES Example 1: Bank Fees & Interest Bank fees are taken from the Incidental SAF Account. The bank will charge for new checks. 1

2 Example 1: Bank Fees & Interest (continued) The bank can also assess a service fee for research or analysis, or statement copies. An account may earn interest. 2

3 Example 1: Bank Fees and Interest (continued) The Bank may charge a fee for a check that was returned by the maker s bank for insufficient funds (NSF, returned check, chargeback). This return check fee can either be entered in the Incidental account or in the account where the check was receipted. For example, if the check was a student s payment for a field trip, the fee imposed by the bank can be taken from either the Incidental account or from the Field Trips account (the account that received the credit for the check). In the illustration below, it is being taken from the Incidental account. 3

4 Example 2: Adjustment of a Receipt/Deposit A: Simple A School enters a receipt in the SAF Ledger for one amount, but when the money is counted at the bank it is a different amount. The Trick or Treat Street fundraiser money was counted at the school for $ ($ in cash, and $8.12 in coin). When it was deposited and counted at the Bank, it came to $ ($ in cash and $8.12 in coin). When the bank statement is received, it lists the deposit as $ So a $10.00 adjustment has to be entered in the Receipt (Column- D) to be added to Receipt 385 so that it matches the deposit on the bank statement. A $10 CREDIT entry is also made in the Fundraisers Account. The Receipt 385 entry in the Ledger cannot be modified from $ to $ after the fact, because the receipt given to the event sponsor was for $ A note is added to Receipt 385 in the Treasurer Receipt Book that the deposit was actually $10.00 more, and states the reason. The deposit amount from the bank statement ($463.12) is entered in Column-E on the Adjustment line to show that the total of the $ receipt + the $10.00 Adjustment = the $ to match (reconcile to) the bank statement. 4

5 Example: Adjustment of a Receipt/Deposit B: Complex 1 A receipt is entered in the SAF Ledger for one amount, but a different amount gets deposited. The 3 rd Grade Teacher collects money (cash) for their class field trip to the Zoo; twenty (20) students at $15/Student. She gives the Bookkeeper $ and gets Treasurer Receipt 386 for $ Before the Bookkeeper deposits the money in the bank, one of the students cannot attend and wants their $15 refunded. The Bookkeeper returns the student their $15.00 from the prepared deposit, and adjusts the deposit amount by $15.00 prior to taking it to the bank. When the bank statement is received, the deposit is listed as $ So a negative (-) $15.00 adjustment has to be entered in the Receipt column (Column-D) to be subtracted from Receipt 386 so that it matches the deposit on the bank statement. A negative (-) $15 CREDIT entry is also made in the Fundraisers Account. The Receipt 386 entry in the Ledger cannot be modified from $ to $ after the fact, because the receipt given to the Teacher was for $ A note is added to Receipt 386 in the Treasurer Receipt Book that the deposit was actually $15.00 less, and states the reason. The deposit amount from the bank statement ($285.00) is entered in Column-E on the Adjustment line to show that the total of the $ receipt + the -$15.00 Adjustment = the $ to match (reconcile to) the bank statement. 5

6 Example: Adjustment of a Receipt/Deposit C: Complex 2 A receipt is entered in the SAF Ledger for one amount, but a bank error processes the deposit for less, AND it carries over into the next month. The School raises $2, from their Trick or Treat Halloween fund raiser for the neighborhood. The Bookkeeper issues Treasurer Receipt 387 to the activity sponsor for $2, The Bookkeeper deposits the money in the bank in October, the last day of the month. On November 2, the Bookkeeper gets a letter from the Bank saying that due to a bank error, the deposit was processed as $2, They apologize for the error, and there will be a $ credit on the November Bank Statement. When the October bank statement is received, the deposit is listed as $2, So a negative (-) $ adjustment has to be entered in the Receipt column (Column-D) to be subtracted from Receipt 387 so that it matches the deposit on the bank statement. A negative (-) $100 CREDIT entry is also made in the Fundraisers Account. The Receipt 387 entry in the Ledger is correct because the receipt given to the activity Sponsor was for $2, The deposit amount from the bank statement ($2,005.45) is entered in Column-E on the Adjustment line to show that the total of the $2, receipt + the -$ Adjustment = the $2, to match (reconcile to) the bank statement. 6

7 Example: Adjustment of a Receipt/Deposit C: Complex 2 (continued) When the November bank statement is received, the NOV GL Tab of the Ledger will then need an Adjustment entry that is the opposite of October s Adjustment entry. There will be an adjustment for a positive $ in the Receipt/Deposit (Columns-D & E) AND in the CREDIT column of the Fundraiser account to record the Bank s correction. 7

8 Example: Adjustment of a Check Entry from a Previous Month In September, the Bookkeeper writes check 4856 for $ to Scholastics for the 4 th Grade Book Fair. The Bookkeeper enters the check in the SAF Ledger. The check is not cashed in September. It is entered on the Outstanding Checks on the September FR Tab. The check is then cashed in October. On the October bank statement, it lists check 4856 as $455.43, a $3.00 difference. The copy of the check sent with the bank statement does indeed show the check amount as $ There was a transcription error when writing the amount on the check stub in the School s checkbook. The amount written on the check itself was correct, but it was incorrectly recorded on the check stub, and then subsequently in the SAF Ledger entry. September is closed. So there is no way to go back and correct the check amount. Therefore, an Adjustment has to be made to the check amount in October. 8

9 The $3.00 is entered in the check amount (Column-H), and $3.00 is entered in the DEBIT Column of the Book Fair account. The incorrect check number, date, and Payee are documented in the description. 9