Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 20 - No. 43)
Which of the following statements best describes a bank reconciliation?
A process used to track all cash inflows and outflows.
A form used to request cash from the bank.
A report that reconciles all assets and liabilities.
A process that explains differences between the cash balance per the bank and the company's records.
Explanation
Bank reconciliation's primary purpose is to identify the reasons for the difference in cash balances reported by the bank and the company.
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