BANKING AFFAIRS

Detailed explanation-1: -The essential process flow for a bank reconciliation is to start with the bank’s ending cash balance, add to it any deposits in transit from the company to the bank, subtract any checks that have not yet cleared the bank, and either add or deduct any other items.

Detailed explanation-2: -A bank reconciliation statement summarizes banking and business activity, reconciling an entity’s bank account with its financial records. Bank reconciliation statements confirm that payments have been processed and cash collections have been deposited into a bank account.

Detailed explanation-3: -Reconciling your bank statement involves comparing your business transactions and balances with the bank’s transactions and balances. Reconciling your bank statement enables you to see if there are any irregularities, such as entering wrong amounts, duplicating entries and other data entry errors.

Detailed explanation-4: -You can do a bank reconciliation when you receive your statement at the end of the month or using your online banking data. There are three steps: comparing your statements, adjusting your balances, and recording the reconciliation.