Question

The need of reconciliation arises in_______accounting.

Answer 1

Maintaining the accounts of any firm is a tedious job that requires the supervision of a trained and experienced accountant. When preparing the accounts of any individual or firm, one of the essential steps undertaken in the preparation of a bank reconciliation statement.

While many contemplate the need for reconciliation, understand that its preparation is imperative, so as to arrive at the correct bank balances in the books of the firm and the bank itself. This is why, while preparing the accounts of any firm or an individual, an accountant will make sure that he prepares a bank reconciliation statement.

Answer 2

Answer:

Double entry Accounting

Explanation:

• Reconciliation is the process of comparing two sets of records to ensure that the figures are correct and in agreement.
• Reconciliation also ensures that the general ledger accounts are consistent, accurate, and complete.
• GAAP requires double-entry accounting, which requires a transaction to be entered into the general ledger twice, and is the most commonly used tool for reconciliation
• Double-entry accounting is a useful method of reconciling accounts because it detects errors on both sides of the entry.
• Every financial transaction is recorded in two accounts, the credit account and the debit account, in double-entry accounting, which is widely used by businesses.
• One account will be debited, and the other account will be credited. When a company makes a sale, it debits cash or accounts receivable (on the balance sheet) and credits sales revenue (on the income statement).

Hence, the need of reconciliation arises in Double Entry Accounting.

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