What do you mean by bank reconciliation statement and why do we create it?

What do you mean by bank reconciliation statement and why do we create it?

A bank reconciliation is the process of matching the balances in an entity's accounting records for a cash account to the corresponding information on a bank statement. The goal of this process is to ascertain the differences between the two, and to book changes to the accounting records as appropriate.
Bank reconciliation is the practice of comparing your records against the bank records. A monthly reconciliation helps you identify any unusual transactions that might be caused by fraud or accounting errors.

 

 

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