A bank reconciliation explains any differences between the balance of a checking account on the depositor's records and the balance reported on the bank statement. True False

The correct answer is True.

Explanation:

The bank reconciliation is a process that allows you to compare and reconcile the values that the company has registered, from a savings or checking account, with the values that the bank supplies through the bank statement.

The companies have an auxiliary bank book in which they register each one of the movements made in a bank account, such as the draft of checks, consignments, debit notes, credit notes, cancellation of checks and consignments, etc.

The financial institution where the respective account is located does its own keeping a complete record of each movement that the client (the company) makes in his account.

Monthly, the bank sends the company an extract showing all those movements that conclude in an account balance on the last day of the respective month.

In general, the balance of the bank statement never coincides with the balance that the company has in its auxiliary books, so it is necessary to identify the differences and the reasons why these values do not coincide.

The verification and confrontation process is what we know as bank reconciliation, a process that consists of reviewing and confronting each one of the movements registered in the auxiliaries, with the values contained in the bank statement to determine what is the cause of the difference.