What is the definition of bank reconciliation?
Bank reconciliation refers to the balancing and verification of a bank holder’s checking account to the periodic bank statements that are produced and sent by the bank to its customer’s.Checking Accounts StatementsChecking account statements are generally produced on a monthly basis. The statement reflects all banking transactions.VerificationAfter the statement from the bank has been received, a cross check of your records to the statement must take place. All items that appear on the bank statement that you did not know about need to be segregated and the same holds true for items appearing on your records.Bank BalanceTo balance your checking account statement to your own records, you must take the above segregated items and add or subtract each of them as the case may be from the other set of books that were not yet affected.Interbank ReconciliationsBanks maintain checking with other banks to conduct their business activities. The same type of balancing and verification between bank
The process of adjusting an account balance reported by a bank to reflect transactions that have occurred since the reporting date. The process of comparing and reconciling accounting records with the records presented on the bank statement. Sometimes disrepancies between the records might occur due to the timing differences when the data is recorded in the accounting and in the bank books. The purpose of bank reconciliation is to check whether the disrepancies are due to timing rather than error.
