Explain some reasons for preparing Bank Reconciliation statement

August 5th, 2011 Comments off
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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.

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Financial Accounting

 
 

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