Master Note of Accounting and Finance

Introduction Business uses cash book that records cash as well as bank transactions. A cash book is one of the type of subsidiary book (Day Book) that records original entry of all cash receipts and payments including bank deposits and withdrawals. Cash book has both debit and credit column representing cash and bank column hence it acts as a ledger account. Bank also records the transactions of customers. They keep all the deposits transaction in credit side and withdraws transactions in debit side of bank book.   Sometime bank as per cash book and cash as per bank book does not match. Hence it is necessary to reconcile it to fix the error of accounting. A bank reconciliation statement is a summary of banking and business activity that reconciles an entity's bank account with its financial records. Importance of Bank Reconciliation Statement Although, it is not necessary to prepare it and not fixed date to prepare it. It is only prepared due to the following reasons: To match re