BUSINESS ADMINISTRATION
FINANCIAL ACCOUNTING
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
whenever the bank refuses to lend the company money.
|
|
|
when an employee is suspected of fraud.
|
|
|
to explain any difference between the depositor’s balance per books and the balance per bank.
|
|
|
by the person who is authorized to sign checks.
|
Detailed explanation-1: -Bank reconciliation statements ensure that payments have been processed and cash collections have been deposited into the bank. The reconciliation statement helps identify differences between the bank balance and the book balance to process necessary adjustments or corrections.
Detailed explanation-2: -Reconciling the two accounts helps identify whether accounting changes are needed. Bank reconciliations are completed at regular intervals to ensure that the company’s cash records are correct. They also help detect fraud and any cash manipulations.
Detailed explanation-3: -For reconciling the balances as shown in the Cash Book and passbook a reconciliation statement is prepared known as Bank Reconciliation Statement or BRS. In other words, BRS is a statement that is prepared for reconciling the difference between balances as per the cash book’s bank column and passbook on a given date.
Detailed explanation-4: -Bank reconciliation statement is prepared to reconcile the balances as per cash book (bank column) and pass book (bank statement) by identifying the causes of differences between the two. It, in no way detects the errors that take place in accounting while book keeping.
Detailed explanation-5: -Ideally, you should reconcile your bank account each time you receive a statement from your bank. This is often done at the end of every month, weekly and even at the end of each day by businesses that have a large number of transactions.