I need you to write an article on what you understand by Bank Reconciliation and under this topic I also want you to discuss about COMPARING THE BANK STATEMENT TO THE CASH and how to HOW TO DO A BANK RECONCILIATION...minimum of 2pages
The procedure of comparing the account balance by the bank with that of the company’s book of accounts and explaining any discrepancy is bank reconciliation. The discrepancy in the balances may be due to the different timing of registering the data in the bank’s books and in your company. This discrepancy is normal and is rectified automatically within small time. Sometimes the discrepancy is due to an error, which has to be rectified manually and to catch this error you need bank reconciliation. Companies generally do bank reconciliation at the end of each month. Reasons for maintaining bank reconciliation regular monthly bank reconciliation keeps your company’s financial records clear and updated. You never build up an erroneous backlog also, you can understand your accounting status all the time. It is important that you have a prompt and reliable communication system with the bank so that you keep your records accurate. Bank reconciliation is an essential part of the accounting system for a small business. During the process, the owner or the accountant compares the general ledger balance to the bank statement balance. Reconciliation allows the auditor to find accounting and bank errors. At the end of the process, the business owner can see the exact amount of cash available.
Bank reconciliation is a process of comparing the balance figures from the bank statement to the general ledger accounts to find the true cash balance. Initially, the balance on the statement is likely to be different from the balance in the ledger due to outstanding checks or deposits that are being processed by the bank. During reconciliation, accountants find any errors and note the outstanding transactions. Once the process is complete, the bank...
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