Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

6. Internal Controls and Reporting Cash

Bank Reconciliation

Financial Accounting

6. Internal Controls and Reporting Cash

Bank Reconciliation

Previous problemNext problem

Struggling with Financial Accounting?

Join thousands of students who trust us to help them ace their exams!Watch the first video

Multiple Choice

Which of the following statements is TRUE regarding the purpose of a bank reconciliation?

A bank reconciliation is used to identify and explain differences between the cash balance per books and the cash balance per bank statement.

A bank reconciliation is only necessary when there is suspected fraud.

A bank reconciliation is required only at the end of the fiscal year.

A bank reconciliation is used to record interest revenue earned on investments.

Previous problemNext problem

Verified step by step guidance

Understand the purpose of a bank reconciliation: A bank reconciliation is a process used to compare the cash balance recorded in the company's books with the cash balance reported on the bank statement. The goal is to identify and explain any differences between the two balances.

Clarify common misconceptions: A bank reconciliation is not only necessary when there is suspected fraud. It is a routine process performed regularly (e.g., monthly) to ensure accuracy in financial records.

Address the timing of bank reconciliations: A bank reconciliation is not limited to the end of the fiscal year. It is typically performed at the end of each accounting period to maintain accurate records.

Explain the scope of bank reconciliations: While a bank reconciliation may involve recording interest revenue earned on investments, its primary purpose is broader. It includes identifying outstanding checks, deposits in transit, and any errors or discrepancies.

Conclude with the correct statement: The true purpose of a bank reconciliation is to identify and explain differences between the cash balance per books and the cash balance per bank statement, ensuring the accuracy of financial records.