Balancing a Checking Account At the beginning of the month,...

$$Balancing a Checking Account At the beginning of the month, Mike had a balance of $\$ 210$ in his checking account. During the next month, he deposited $\$ 80,$ made an ATM withdrawal for $\$ 120,$ made another deposit of $\$ 25,$ and made two electronic bill payments: one for $\$ 60$ and the other for $\$ 32 .$ He was also assessed a monthly service charge of $\$ 5 .$ What was his balance at the end of the month?$$

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Key Concepts

Transaction Types

Understanding the difference between various transaction types is crucial. Deposits add funds to an account, whereas withdrawals and electronic payments remove funds. Recognizing these distinctions helps in tracking and managing financial activities effectively.

Bank Account Reconciliation

This concept involves comparing the recorded transactions against the actual bank statement to ensure accuracy. Reconciliation is key to detecting errors, avoiding overdrafts, and validating that all transactions, including service charges and fees, have been correctly accounted for.

Arithmetic Operations

In finance, arithmetic operations such as addition and subtraction are used to update account balances based on transactions. Deposits increase the balance while withdrawals and fees decrease it, making accurate calculations essential for maintaining correct financial records.

Service Charges

Bank accounts often incur service fees that reduce the overall balance. Being aware of these charges is important because they affect the closing balance and must be included in the reconciliation process to maintain accurate financial records.

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