What is bank reconciliation?

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Accepted Answer

Bank reconciliation is the process of comparing and matching the balances in a company's accounting records with the bank statement.

Bank reconciliation ensures that the company's records accurately reflect the transactions and balances in its bank accounts.
It involves comparing the company's cash account balance with the bank statement balance and identifying any discrepancies.
Common reasons for discrepancies include outstanding checks, deposits in transit, bank fees, and errors.
The process involves reconciling items such as checks issued but not yet cleared, deposits not yet recorded by the bank, and any errors or discrepancies.
Bank reconciliation helps in detecting errors, preventing fraud, and ensuring the accuracy of financial statements.

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