Q15RQ - Horngren'S Financial And Managerial Accounting

Question

What is a bank reconciliation?

Step-by-Step Solution

Answer

Bank reconciliation is a statement used to adjust the balance of the bank account and company’s books.

Step 1: Definition of the bank reconciliation

Bank reconciliation is a statement that shows the difference between a bank passbook and a company’s books.

Step 2: Meaning of bank reconciliation

A bank reconciliation statement is also called a summary that adjusts the balance of the bank account and the balance in the company’s books. Bank reconciliation statement includes deposit, withdrawal and other activities. The bank reconciliation statement is prepared when there is a difference between the bank account balance and the company’s books balance.