What is the purpose of bank reconciliations What are the dan

What is the purpose of bank reconciliations? What are the dangers of not reconciling a bank account? Why would this be an issue for businesses? How does technology (e.g. online banking or phone app) play a part in the procedure of bank reconciliations\"

Do you reconcile your bank account(s)? How do you tell how much money you have available? Does this system always work for you?

Solution

Bank reconciliation is used to compare the records to those of the bank to see weather any difference these two set of records for the cash transactions the ending version of cash records is called book balance while ending version of bank is bank balance

IN CASE OF FAILURE TO RECONCILE THE BANK ACCOUNT THIS PUTS THE ORGANISATION AT RISK THAT IS INCREASE IN RISK OF ACCOUNTING ERRORS AND MISAPPROPRIATION OF CASH AS WELL

THIS IS USED IN BUSINESS TO REDUCE THE RISK OF CASH DEFULCATIONS FRAUDS BY COMPARING CLOSING BALANCE OF BANK WITH THE RECORDS IN BOOKS AND ENSURE WEATHER THEIR ARE TALLIED OR NOT

Yes this system always works it presents a good Internal control system in the organisation results in reduce the errors or mistakes in both cash book as well as pass book

Thank you hope this usefull