What is bank reconciliation

Question

Accepted Answer

Bank reconciliation is the process of comparing a company's bank statement with its own financial records to ensure accuracy.

Bank reconciliation helps identify any discrepancies between a company's records and the bank's records.
It involves comparing deposits, withdrawals, and other transactions on the bank statement with those in the company's accounting system.
Any differences are noted and investigated to ensure accuracy and prevent fraud.
Bank reconciliation is typically done on a monthly basis.
Example: A company may have recorded a deposit in their accounting system, but it may not have been reflected on the bank statement due to a delay in processing.
Example: A company may have issued a check that was never cashed, resulting in a discrepancy between their records and the bank's records.

Accepted Answer

To know the company's financial records on their bank statements to confirm that all transactions are notable is bank reconciliation.

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