Week 9 Accounting Workshop: Reconciling the Bicycle Shop's Cash

Part 1 — The Big Picture

This week you learned how a business guards its cash with control activities and how a monthly bank reconciliation finds the one true cash balance. In this workshop you reconcile one small set of books end to end: the bicycle shop's end of Month 3. You sort each reconciling item to the bank side or the book side, foot both sides in a free spreadsheet until they meet, journalize only the items that need entries and post them to Cash, read what the result shows in one plain sentence, and then check a chatbot's version of the same work. This is the adjust-and-report mode of the Accounting Workshop: the record-and-post work from Week 3 carries forward into the entries, and the analyze-and-explain work happens in your plain-sentence reading and your critique.

Time budget: Plan for about 90 minutes.

Part 2 — The Task

Guiding question: What is the bicycle shop's true cash at the end of Month 3, and which reconciling items have to reach its journal?

Workshop data: Dataset F, the bicycle shop's end-of-Month 3 bank reconciliation (illustrative)

Source: The running case at the end of Month 3: an illustrative, unnamed bicycle repair and sales shop, organized as a corporation by two founders, reconciling its bank statement with its Cash account; it describes no real business.

• Rows: 7 reconciling items, three on the bank side and four on the book side, plus the two starting balances; the reconciliation table has 9 rows and the entry table has 4 rows
• Balance per bank statement: $8,450 at the end of Month 3
• Balance per books (Cash): $8,851 at the end of Month 3
• Bank-side items: a $1,200 deposit in transit; outstanding check No. 211 for $400 and check No. 214 for $750
• Book-side items: a $25 bank service charge; a $300 NSF check from a customer; $10 of interest earned
• Check No. 209: written for $95 and recorded as $59; it paid a supplier on account

Part 3 — Materials & Procedure

Tools and materials

• A free spreadsheet (Google Sheets, or any free spreadsheet) for journals, T-accounts, trial balances, schedules, and statements, with every total computed by formula; the SEC's free EDGAR search for public companies' annual reports; and one approved chatbot used as a sparring partner whose entries, totals, and claims about standards and tax rates the student checks by hand and against the pinned source before trusting them
• A free spreadsheet (Google Sheets, or any free spreadsheet)
• One approved chatbot

Ways of working

• record-and-post
• adjust-and-report
• analyze-and-explain

Procedure

1. Read Dataset F in Part 2 twice. For each of the seven reconciling items, write one line in your own words saying whether the shop's Cash account or the bank had not yet recorded it. Check: Seven short lines, each naming which record was behind.
2. Open a new sheet and copy the reconciliation table from Part 4. Fill in the side, add or subtract, and amount for every row, typing each subtraction with a minus sign. Tool: A free spreadsheet (Google Sheets, or any free spreadsheet). Check: Every row filled, with three items on the bank side and four on the book side.
3. Total each side with a SUM formula that starts from its own balance, and add a check cell that subtracts the adjusted book balance from the adjusted bank balance. Tool: A free spreadsheet (Google Sheets, or any free spreadsheet). Check: Both adjusted balances are equal, and the check cell shows 0.
4. On a second tab, copy the entry table from Part 4 and write one balanced entry for each book-side item, debit first; then post them to a Cash T-account that starts at the balance per books. Tool: A free spreadsheet (Google Sheets, or any free spreadsheet). Check: Four entries whose debits equal their credits, and a Cash balance after posting that matches both adjusted balances.
5. Answer the analysis questions in Part 5, including the plain sentence that says what the reconciliation shows, and match each shop practice in the third table to its control category. Check: Written answers to all five questions and a completed control table.
6. Paste your two tables and then the Part 6 prompt into one approved chatbot. Compare every item, every total, every entry, and every claim about a standard or a rate with your own work and with Chapter 9, and write the critique report, or complete the equivalent route instead. Tool: One approved chatbot. Check: A three-to-five-sentence report that quotes at least two of the chatbot's slips and corrects each by hand, or the marked-up equivalent-route analysis.

Fallback route

When to use it: Use this route if you cannot open a spreadsheet or print the tables.

Copy the three tables by hand onto paper or into any text file, read Dataset F from this page, add and subtract each side by hand, add each side twice, and complete every analysis question and the critique step in the same order. Submit a photo or scan of the paper, or the text file, for equal credit.

This route earns the same credit as the primary route.

Part 4 — The Scaffold

Place every item on the side whose record was behind, so each side can be adjusted from its own starting balance until the two meet.

Student scaffold table 1

Item	Side (bank or book)	Add or subtract	Amount	Needs a journal entry?
Balance per bank statement	Bank	Starting balance	8,450	No
Deposit in transit
Outstanding check No. 211
Outstanding check No. 214
Balance per books (Cash)	Book	Starting balance	8,851	No
Bank service charge
NSF check from a customer
Interest earned
Error on check No. 209 (written $95, recorded $59)

Record only the items that are news to the shop's books, each with equal debits and credits, so the Cash account reaches the adjusted balance.

Student scaffold table 2

Entry	What it records	Account debited	Account credited	Amount
1	Bank service charge
2	NSF check from a customer
3	Interest earned
4	Error on check No. 209

Name the control category behind each practice, so you can see which of the six categories protect the shop's cash.

Student scaffold table 3

Shop practice (illustrative)	Common category of control activities
A monthly bank reconciliation prepared by someone who does not handle cash
Each clerk uses a separate cash drawer and register login
A locked stockroom for bicycles and a safe for cash

Part 5 — Analysis Questions

1. Compute the adjusted bank balance and the adjusted book balance, showing every addition and subtraction from each starting balance.
2. Compute the starting gap between the two balances, and show how the net of the bank-side items and the net of the book-side items together explain all of it.
3. Explain why only the four book-side items get journal entries, and why those entries touch Cash even though Week 4's accrual and deferral adjustments never do.
4. Write one plain sentence saying what the reconciliation shows. Then say how the bank side would change if check No. 214 had cleared before the statement was printed, and whether the adjusted balance would change, in words.
5. Choose one reflection: (a) which reconciling item did your first instinct put on the wrong side, and what changed your mind? or (b) name one thing a matching reconciliation cannot prove, and one of the six control categories that would help cover it.

Part 6 — AI-Critique Moment

Choose one equal-credit critique route. Route A: ask an approved AI tool to critique your completed work, then check its response against your own evidence. Route B is the no-AI equivalent printed below.

Approved tools: Claude, Gemini, ChatGPT, Grok, Microsoft Copilot.

Prompt to paste:

I've pasted my completed reconciliation and journal entries above. Here is an illustrative bicycle shop at the end of Month 3. Its bank statement shows $8,450 and its Cash account shows $8,851. A $1,200 deposit is in transit, and check No. 211 for $400 and check No. 214 for $750 are outstanding. The statement also shows a $25 service charge, a $300 NSF check from a customer, and $10 of interest earned, and check No. 209, which paid a supplier on account, was written for $95 but recorded as $59. Please prepare the bank reconciliation, write every journal entry it requires, and say what the shop's true cash is. Then tell me which accounting standard requires a monthly bank reconciliation, whether the shop's net income for the month tells us its cash, whether the $200 a month of depreciation on its equipment means the equipment is worth less, what Social Security rate and wage base apply to the mechanic's wages in 2026, and whether the shop could use LIFO for its bicycles under IFRS.

Test the response for these likely failures:

• Chatbots often move the two outstanding checks to the book side because they are the shop's own checks.
• Chatbots sometimes record the $1,200 deposit in transit as new Service Revenue when it shows up on the reconciliation.
• Chatbots sometimes write the NSF entry backwards, debiting Cash and crediting Accounts Receivable.
• Chatbots sometimes correct check No. 209 with unequal sides, such as Accounts Payable 95 against Cash 36.
• Chatbots often add the $36 error instead of subtracting it and report an adjusted book balance of $8,572.
• Chatbots sometimes push the $25 service charge and the $10 of interest into the next month because the shop reads the statement after the month ends.
• Chatbots sometimes treat the shop's net income as a check on its cash balance.
• Chatbots sometimes name an accounting standard, with a deadline in days, that supposedly requires a monthly reconciliation.
• Chatbots often describe the $200 a month of depreciation as the fall in what the equipment would sell for.
• Chatbots often quote an earlier year's Social Security wage base when asked about the mechanic's wages.
• Chatbots sometimes say a business reporting under IFRS may choose LIFO for its inventory.

Write three to five sentences naming what the chatbot got right and at least two places where it slipped into one of the failures above, quoting its words and correcting each by hand against Dataset F, Chapter 9, and the pinned source.

Equivalent route (no AI required)

No AI account is required for this workshop. This route assesses the same objectives, Objective 6 (describe internal control and its components, and account for cash, including the bank reconciliation, and for receivables, including the allowance method and notes receivable) and Objective 2 (analyze business transactions with the accounting equation and record them in a journal using double-entry bookkeeping, post them to the ledger, and prepare a trial balance), takes comparable effort of about the same 90 minutes, uses the same rubric, and earns the same credit. Instead of the chatbot, critique this flawed analysis of Dataset F, printed here in full: "At the end of Month 3 the bank says $8,450 and the books say $8,851. The bank is always right, so the shop's true cash is $8,450. Checks No. 211 and No. 214 are the shop's own checks, so they belong on the book side: 8,851 − 400 − 750 = 7,701. The $1,200 deposit in transit is new money, so record it: debit Cash 1,200, credit Service Revenue 1,200. The NSF check is recorded as debit Cash 300, credit Accounts Receivable 300. For check No. 209, debit Accounts Payable 95, credit Cash 36. The book side then runs 8,851 − 25 − 300 + 10 + 36 = 8,572. The $25 fee and the $10 of interest belong to Month 4, because that is when the shop reads the statement. The shop's net income for Month 3 shows how much cash it has, so the reconciliation could be skipped. FASB rules require every business to reconcile its bank account within 10 days of the month's end. The equipment's $200 of monthly depreciation shows its resale value is falling, which is part of why the bank balance is lower. When the shop pays its mechanic, it withholds Social Security at 6.2 percent on wages up to the wage base the Social Security Administration set two years ago. And under IFRS the shop could use LIFO for its bicycles." Mark every error you find, name the failure it shows, and correct it by hand against Dataset F, Chapter 9, and the pinned source; find at least two. The wage base in it is out of date on purpose and is itself one of the errors. Submit the marked-up analysis with your corrections in place of the chatbot report and share link.

Part 7 — What to Submit

• The completed reconciliation, entry, and control tables from Part 4, with both sides footed
• Written answers to all five analysis questions
• The chatbot critique report with its share link, or the equivalent route's marked-up flawed analysis

Deliverable:

A short Accounting Workshop report on the bicycle shop's end of Month 3: three completed tables (the reconciliation, the four book-side entries, and the control categories), written answers to five analysis questions, and a critique of a chatbot's version of the same reconciliation, or, on the equivalent route, a marked-up correction of the printed flawed analysis. Choose how you show it: a completed spreadsheet with written answers, a recorded explanation with a transcript, or hand-drawn tables with short notes; every form is graded by the same scoring criteria. Submit in any accessible file type or as a link; a recorded response may be submitted as audio or video with a transcript, or as text.

Rubric

The rubric below shows how each submitted part is evaluated; bands are full, partial, or none.

Workshop evaluation criteria

Criterion	Full	Partial	None
Reconciliation sorted and footed	All seven items sit on the right side with the right direction, and both sides reach 8,500 by formula or written sum from their own starting balances.	Five or six items are placed correctly, or both sides are footed but one item is on the wrong side or added instead of subtracted.	No reconciliation, or sides that never reach a common balance.
Balanced book-side entries, posted to Cash	The four book-side entries have the right accounts and amounts, each balances with the debit listed first, no bank-side item has an entry, and Cash after posting matches the adjusted balance.	Two or three entries are right, or all four are present but one is reversed, unbalanced, or a bank-side item also has an entry.	Fewer than two correct entries, or entries written only for bank-side items.
Plain-sentence reading and the effect of a timing change	One plain sentence says what the reconciliation shows, and the answer says in words that an earlier-clearing check No. 214 would leave the bank side and lower the bank balance while the adjusted balance stays the same.	The plain sentence or the timing effect is present, but not both, or one of them is vague.	Neither the plain sentence nor the timing effect is present.
Caught-and-corrected AI slip, on either route	The chatbot critique report, or the equivalent route's marked-up flawed analysis, quotes at least two errors and corrects each by hand against Dataset F, Chapter 9, and the pinned source; either route earns this band equally.	One error is quoted and corrected on either route, or errors are named without a correction.	No critique on either route, or chatbot output is pasted without checking it.
Controls, limits, and reflection	The control table names all three categories correctly, the gap explanation closes the whole difference, and the chosen reflection option is answered with a specific item or control from Dataset F or Dataset E.	Two of those three parts are present, or one is general.	None of the three parts is present.

Quality Gate

• Every reconciling item sits on the side whose record was behind, and both sides start from their own balances.
• Both adjusted balances are computed by formula or written as a sum, and they are equal.
• Only the book-side items have journal entries, and each entry lists the debit first with equal debits and credits.
• No standard, rule, rate, statistic, or quotation is invented anywhere in the submission.
• The plain-sentence reading names what the reconciliation shows and treats neither starting balance as the true cash.
• The critique quotes the chatbot or the flawed analysis and corrects at least two errors by hand.