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Question
Give any three reasons for preparing bank reconciliation statement.
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Solution
The main reasons for preparing a bank reconciliation statement are:
- To identify the reasons for the difference between the bank balance as per the cash book and bank balance as per bank statement.
- To identify the delay in the clearance of cheques.
- To ascertain the correct balance of the bank column of the cash book.
- To discourage the accountants of the business as well as the bank from misusing funds.
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