Explanation:
Businesses maintain a cash book to record various transactions. Also as a record to cross-check bank statement. The process of comparing both the records is Reconciliation. It checks the errors and states them in BRS (Bank Reconciliation Statement). In addition, reconciliation takes place every month to maintain the balance between the two records. Moreover, reconciliation brings out the potential difference that profit a firm when ruled out. There are many things that come up in a firm’s cash record which needs mending.Bank Reconciliation Statement is as necessary as a bank statement for a cash account. It records necessary changes mandatory to declare the bank statement and cash book records error-free and hence, required. Moreover, some random errors like noting wrong entries to the data, etc. might not be replaced.
Preparation of Bank Reconciliation Statement