A Bank Reconciliation Statement is prepared with the help of ?

The correct answer is the 1. Bank statement and bank column of the cash book, because it will help the business to verify whether amounts entered and entries recorded are correct or not. It will also help in verifying the balances of bank statements and cash books whether they tally or not.

What is Reconciliation?

Reconciliation is an accounting procedure that compares two sets of records to check figures are correct and in agreement. Reconciliation can also be used for personal purposes.

What is a Bank Reconciliation Statement?

A statement showing causes of disagreement between the balance of bank statement and bank column of the cash book at the end of a specific period is called a Bank Reconciliation Statement.

Steps in preparation of Bank Reconciliation Statement

Step 1: Comparing items appearing on the debit and credit sides of the bank statement and bank column of the cash book.

Step 2: Make a list of missed entries.

Step 3: Analyse the causes of differences.

Step 4: Select the date for the preparation of the Bank Reconciliation Statement.

Step 5: Choose the starting point i.e balance as per cash book or balance as per bank statement.

Step 6: Adjust the starting point by adding or subtracting the missed entries.

Step 7: Bank Statement must match with the cash book.

To prepare a bank reconciliation statement a business will need a bank statement from its bank and cash book which it prepares to record entries.