Question

Explain the Importance of "Bank Reconciliation Statement"..​

Answer 1

$\huge\bf\purple{\underline{ANSWER:}}$

Explain the Importance of "Bank Reconciliation Statement".

Bank reconciliation statement is a report which compares the bank balance as per company’s accounting records with the balance stated in the bank statement.

1. Preparation of bank reconciliation helps in the identification of errors in the accounting records of the company or the bank.
2. Cash is the most vulnerable asset of an entity. Bank reconciliations provide the necessary control mechanism to help protect the valuable resource through uncovering irregularities such as unauthorized bank withdrawals. However, in order for the control process to work effectively, it is necessary to segregate the duties of persons responsible for accounting and authorizing of bank transactions and those responsible for preparing and monitoring bank reconciliation statements.
3. If the bank balance appearing in the accounting records can be confirmed to be correct by comparing it with the bank statement balance, it provides added comfort that the bank transactions have been recorded correctly in the company records.
4. Monthly preparation of bank reconciliation assists in the regular monitoring of cash flows of a business.

HOPE IT HELPS

PLEASE MARK ME BRAINLIEST ☺️

Answer 2

Answer:

$\huge{When you reconcile your business bank account, you compare your internal financial records against the records provided to you by your bank. A monthly reconciliation helps you identify any unusual transactions that might be caused by fraud or accounting errors, and the practice can also help you spot inefficiencies.}$