All rights reserved.AccountingCoach® is a registered trademark. ch_fluidH = 1; Reconciling your bank account each month allows you to notice if your financial institution makes a mistake when entering and processing each transaction. The statement also helps you find errors in your own financial records. Reasons to prepare a bank reconciliation statement Nature and purpose of a bank reconciliation statement. By reconciling the differences that exist between the two, a Bank Reconciliation Statement helps in arriving at the exact value of the amount of bank balance held on a particular date. //-->. Overall, the main reason for preparing a bank reconciliation statement(BRS) is to have strict internal control over the company’s cash inflows and outflows. In the reconciliation statement, your Bank Book entries are compared to the Bank Statement. The bank statement records all the bank's transactions with the business. Every entity has to prepare a bank reconciliation statement. List a few potential advantages, Explain the ROLE AND TASKS of Recruitment Consultant, In an organization, briefly explain the benefits or advantages and disadvantages of decentralization, What are the advantages and disadvantages of using Common Stock Financing from the viewpoint of the Corporation, Accounting Equation & Double Entry System, Accounting Quiz/Test Your Accounting Knowledge, Bad Debt & Allowance For Doubtful Accounts & Provision, Malaysia(n) Financial Reporting Standards, Inspirations/ Motivational Stories/ Quotes. Find out which book has a greater balance and which one has a lesser balance Post to the bank account in the relevant book based on what has actually happened. google_color_text = "333333"; Bank Reconciliation Statement. Even with regular logging of your transactions, you may miss one or enter a number incorrectly in your records. ch_color_bg = "#FFFFFF"; Tabulate below are some of the reasons to prepare bank reconciliation statement: Explain some reasons for preparing Bank Reconciliation statement, Revision Notes on Bank Reconciliation Statement, How Many Ways To Prepare The Bank Reconciliation And How Frequent Should We Prepare It, GCE “O” Level Principles Of Accounts ( Singapore ), Internal Control Checklist/Questionaires/Assessment On Bank And Cash, What is an Adjusted Trial Balance and Adjusting Journal Entry, In Personnel Management,do you think that labour turnover has any advantages to an organization? Markson’s & Co. has a balance as per pass book of $1,000 as on 31st March 2019. It would act as a moral check on employees so that they do not indulge in the embezzlement of bank cheques, which would ultimately cause loss to the firm. How Bank Reconciliation Works Having this additional person prepare the bank reconciliation reduces the odds of an improper use of the company's cash. google_color_border = "FFFFFF"; 1.