CARSAM Quick Reference Guide for Users May 2012 CORPORATE ACCOUNT RECONCILIATION.
Purpose of Bank Account Reconciliation
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Transcript of Purpose of Bank Account Reconciliation
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PURPOSE OF BANK ACCOUNT RECONCILIATION
A PRESENTA T I ON BY COGNEESO L
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Bank account reconciliation is theprocess that is carried out to matchup transactions stated in your bankstatement to that of your company
financial records. It is a criticalaccounting task that you should
carry out each month.
WHAT IS BANK ACCOUNTRECONCILIATION?
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Ensure BalanceAccuracy It match up the
transactions on boththe side and confirmsthe accuracy of thebalances shown in thecompany’s books withbank records.
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SpeedyRectification ofDiscrepanciesA bank reconciliation
discover problems that mayarise due to unusual
transactions or accountingerrors. It prevent more than
duplicate and erroneouspayment
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Detect MissingEntries Consider reconciling
accounts with heavyvolume monthly orweekly basis as it givesindication to updatethe entries if they arenot recorded in thebooks.
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Identify UncasheChecks
Reconciling bank accounthelps to check undue
delay in the collection andclearance of some
cheques.
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InternalAuditing
.
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When it comes forcompany annual audit,the auditors alwaysanalyse the company's bank reconciliationstatement as part of theirtesting procedures.
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Evaluate BusinessPerformanceAccount bank
reconciliation is keycontrol in producingaccurate financialstatements and helpin reducing the risk ofany financial fraudthat take place.
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KEY POINTS TO CONSIDER
Bank account reconciliationsshould be complete - Make sure noaccount left behind.Account reconciliations should beaccurate.It should be reviewed in a timelymanner.Account reconciliation shouldfollow accounting principlesThe account reconciliation processshould be constantly reviewed andimproved as it reflects thecompany's position.
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