The purpose of preparing a bank reconciliation statement is to ____________.

ascertain that the difference between the cash book balance and the bank statement balance has been accounted for

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correct errors in the cash book or errors in the bank statement

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amend the balance of the bank statement of the firm

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amend the balance in the cash book of the firm

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Solution

The correct option is C amend the balance of the bank statement of the firm
The purpose of preparing a bank reconciliation statement is to amend the balance of the bank statement of the firm.Such amendment is required because of various errors of omissions, casting errors and timing differences arising during accounting the bank transactions.
bank reconciliation statement is the only way to solve these errors and reflect a proper bank balance.

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Similar questions

Q. A business firm periodically prepares a bank reconciliation statement to reconcile the bank balance as per the cash book with the pass book as these two show different balances for various reasons.

State whether the following Statements are True or False.

1) Bank Reconciliation Statement is prepared by Bank.
2) Bank Reconciliation Statement is prepared at the end of stipulated period.
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5) Credit balance of Bank column of Cash Book represents the balance as per Cash book.
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