In Bank Reconciliation why it is show differences and how to adjustment?

Question

Accepted Answer

Bank reconciliation shows differences due to timing discrepancies or errors. Adjustments are made to correct these discrepancies.

Differences in bank reconciliation can be due to timing discrepancies, such as outstanding checks or deposits.
Errors in recording transactions can also lead to differences in bank reconciliation.
Adjustments are made by identifying the source of the difference and making the necessary corrections in the accounting records.
For example, if a check issued by the company has not cleared the bank yet, it will result in a difference in the bank reconciliation. The adjustment would involve updating the records once the check clears.
Similarly, if a deposit made by the company is not reflected in the bank statement, an adjustment would be made to reconcile the discrepancy.

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