Scribd
Upload
12 views10 pages

HASNA - Bank Reconciliation System

Uploaded by

rizwana Umar
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
12 views10 pages

HASNA - Bank Reconciliation System

Uploaded by

rizwana Umar
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
You are on page 1/ 10

Bank

Reconciliati
on System
Ensuring Financial
Accuracy

HASNA XI B
Introduction

Bank reconciliation is crucial in financial


management as it ensures the accuracy of financial
records by reconciling discrepancies between a
company's internal accounts and the bank
statement, providing a reliable basis for decision-
making and financial reporting.
Defi nition of Bank Reconciliation

Bank reconciliation is the process of comparing and


adjusting a company's internal financial records
with the information on its bank statement,
ensuring consistency and accuracy in financial data.
Purpose of Bank Reconciliation

The purpose of bank reconciliation is to identify and


rectify discrepancies between a company's
accounting records and the bank statement,
ensuring financial accuracy and facilitating eff ective
decision-making.
Example #1 - Outstanding Check

Outstanding checks refer to payments issued by a


company but not yet cleared by the bank. For
example, if a check is sent to a supplier but not
cashed by the end of the accounting period, it
becomes an outstanding check, causing a
temporary diff erence between the company's
records and the bank statement.
Example #2 - Deposits in Transit

Deposits in transit represent funds that a company


has deposited into its bank account but are not yet
reflected on the bank statement. For instance, if a
company makes a deposit on the last day of the
month, it may not appear on the bank statement
until the following month, causing a temporary
discrepancy in records.
Reconciliation Process

The reconciliation process involves comparing a


company's internal financial records with the
corresponding entries on its bank statement,
identifying and rectifying any discrepancies to
ensure the accuracy and consistency of financial
information. It concludes with adjusted balances for
both the company's records and the bank
statement.
Common Discrepancies

Common discrepancies in bank reconciliation


include errors in recording, unprocessed
transactions, and diff erences in timing between
when transactions are recorded in the company's
books and when they appear on the bank
statement. Resolving these ensures alignment
between internal records and the bank statement.
Importance in Financial Management

Bank reconciliation is vital in financial management


as it safeguards financial accuracy, helps detect
discrepancies, and provides a reliable foundation for
informed decision-making and transparent financial
reporting.
Conclusion

In conclusion, regular bank reconciliation is an


essential practice to maintain financial integrity,
ensuring that a company's internal records align
with external bank statements, thus fostering
trustworthiness in financial management and
reporting.

You might also like