Question

The main purpose of preparing a bank reconciliation statement is?

• A. To know the bank balance
• B. To know the balance of bank statement
• C. To correct the cash book
• D. To identify and correct the causes of differences between cash book and bank statement

Answer 1

The correct option is D

To identify and correct the causes of differences between cash book and bank statement

A bank reconciliation statement is a process that explains the difference on a specified date between the bank balance shown in an organisation's bank statement, as supplied by the bank, and the corresponding amount shown in the organisation's own accounting records i.e. cash book.