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Bookkeeping › Bank Reconciliation

What is a bank reconciliation?

Beginner

Answer

A bank reconciliation is a statement that reconciles the balance in the business's cash book with the balance on the bank statement, explaining the differences between them. It confirms the accuracy of the cash book, identifies items not yet recorded, and detects errors or fraud in either record.
Real-world example Each month the bookkeeper prepares a bank reconciliation to explain why the cash book and bank statement differ.

Common follow-ups: What two balances does it reconcile? | Why perform it regularly?