Explain some reasons for preparing Bank Reconciliation statement

August 5th, 2011 Comments off
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Tabulate below are some of the reasons to prepare bank reconciliation statement:

The reasons for us to prepare Bank Reconciliation statement are as follows:

  • 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


  • and finally to check on fraud and embezzlement


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