Bank Reconciliation statement, is a statement prepared at periodical intervals, with a view to indicate the items which cause disagreement between the balances as per the bank columns of the cash book and the passbook, on any given date.
Importance of bank reconciliation statement
A. Similarity of balance between cashbook and passbook canbe confirmed by accountant, with the help of bank reconciliation statement.
B. It also helps, to detect, any mistakes that have taken place in both the cash book and passbook.
C. It also prevents the frauds, by recording disagreement between both balance.
D. Any undue delay in the clearance of cheque will be shown up by the reconciliation statement.
E. This statement is prepared only by business concerns.
F. To reveal exact cash balance lying with the bank.
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