|Reasons for preparing Bank Reconciliation statement
- To detect items not entered and errors in the cash book
- To ensure that the cash book entries are complete. Items missing from the cash book will not have been recorded in other ledger accounts and the business records will be unreliable
- To discover bank errors ( bank personnel too make mistake!!)
- To discover dishonored cheques
- To monitor “stale” cheques ( those cheques which have not been banked by the payee within the local banking law of six (6) months
- To check on fraud and embezzlement.