Asked by Gywneth Castro on Jul 20, 2024
Verified
Describe a bank reconciliation and discuss its purpose.
Bank Reconciliation
The process of verifying the balance of a company's bank accounts with their financial records, identifying any discrepancies that may exist.
Purpose
Purpose refers to the reason for which something is done or created or for which something exists.
- Understand the process and rationale behind doing a bank reconciliation and the implications for cash management.
Verified Answer
BM
Basma Madouh HashemJul 26, 2024
Final Answer :
A bank reconciliation is a report explaining any differences between the checking account balance according to a depositor's records and the balance reported on the bank statement.It can be used to prove the accuracy of a company's cash records.The balance of a checking account reported on the bank statement rarely equals the balance in the depositor's accounting records due to information that one part has that the other does not,or due to potential errors.The reconciliation procedure examines the differences based on the information available to the company and adjusts for the differences.It also serves as a format for the discovery and correction of errors.
Learning Objectives
- Understand the process and rationale behind doing a bank reconciliation and the implications for cash management.
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