KEYTAKEAWAYS
Discover the significance of bank reconciliation – a meticulous cross-check ensuring alignment between your cashbook and bank statements. Vital for accurate financial records and fraud prevention.
CONTENT
DEFINITION
Bank reconciliation is a financial process involving a thorough cross-check to ensure that the amounts recorded in an organization’s cashbook align precisely with the corresponding entries in its bank statements.
This essential accounting practice serves to identify and rectify any discrepancies between the two sets of financial records. The reconciliation process involves comparing transactions, such as deposits, withdrawals, and checks, recorded by the entity with those documented by the bank. Discrepancies may arise due to factors like outstanding checks, bank fees, or delays in transaction processing.
