Explain the procedure of preparation of a bank Reconciliation statement.
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Bank reconciliations can help a company to verify that its bank account ending balance per the bank matches the balance on hand per the company's general ledger.
The process of preparing a bank reconciliation involves making adjustments to the balances in both the bank statement and the company's records to confirm that the ending balances match and that every item is properly accounted for.
It is important to prepare bank reconciliations in a timely and regular basis (monthly, for example), so if questions regarding bank fees or bank errors arise both the company and the bank can be made aware as soon as possible.
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