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Infographic: Bank Reconciliation Statement | Accountancy Class 11 - Commerce

The document Infographic: Bank Reconciliation Statement | Accountancy Class 11 - Commerce is a part of the Commerce Course Accountancy Class 11.
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FAQs on Infographic: Bank Reconciliation Statement - Accountancy Class 11 - Commerce

1. What is a bank reconciliation statement and why is it important?
Ans. A bank reconciliation statement is a document that compares the bank's records of transactions with the company's own records. It is important because it helps identify discrepancies, ensures accuracy in financial reporting, and aids in detecting fraud or errors.
2. How often should a bank reconciliation statement be prepared?
Ans. A bank reconciliation statement should be prepared regularly, typically monthly. This frequency aligns with the bank statement cycle, allowing businesses to promptly address any discrepancies and maintain accurate financial records.
3. What are common reasons for discrepancies in bank reconciliations?
Ans. Common reasons for discrepancies in bank reconciliations include outstanding checks, deposits in transit, bank fees not recorded in the company’s books, errors in recording transactions, and fraudulent activities. Addressing these issues is crucial for maintaining accurate financial statements.
4. What steps are involved in preparing a bank reconciliation statement?
Ans. The steps involved in preparing a bank reconciliation statement include gathering bank statements, comparing the bank's records with the company's records, identifying discrepancies, adjusting both sets of records for any errors, and finally, ensuring that the adjusted balances match.
5. What is the impact of not performing regular bank reconciliations?
Ans. Not performing regular bank reconciliations can lead to various issues such as inaccurate financial statements, inability to detect fraud, cash flow problems, and potential legal issues due to misrepresentation of financial data. Regular reconciliations help maintain financial integrity and control.
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