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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