Reconciling the Bank Statement: Introduction
At times, you may have come across a situation where you were surprised to find that your bank account had less money than you thought. This could probably happen if you forgot to record a withdrawal entry in your checkbook. It is therefore important to reconcile your checkbook with your bankbook.
Business owners and their accountants also need to keep the cash balance records updated. The Cash in Bank account in the general ledger should be regularly compared with the balance in the checkbook. The process of comparing the checkbook and the bankbook is called reconciliation.
This section explains how to prove cash and create bank reconciliation statements. The final part of this section explains the key terms used in this section. Short questions, fill in the blanks, and multiple choice questions are given to test your understanding.