Question

What do you understand by bank reconciliation statement. Why is it prepared?

Answer 1

Answer:

A bank reconciliation statement is a summary of banking and business activity that reconciles an entity's bank account with its financial records. The statement outlines the deposits, withdrawals and other activities affecting a bank account for a specific period.

BRS is prepared on a periodical basis for checking that bank related transactions are recorded properly in cash book's bank column and also by the bank in their books. BRS helps to detect errors in recording transactions and determining the exact bank balance as on a specified date

Two different firms prepare a cash record and bank statement. A firm records transactions in the cash book. A bank issues a bank statement every month. However, a third party prepares the Bank Reconciliation statement.

Explanation:

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Answer 2

Answer:

BRS is prepared on a periodical basis for

checking that bank related transactions are

recorded properly in cash book's bank column

and also by the bank in their books. BRS helps

to detect errors in recording transactions and

determining the exact bank balance as on a specified date.