A bank reconciliation should be prepared when an employee is suspected of fraud. to explain any difference between the depositor's balance per books with the balance per bank. by the person who is authorized to sign checks. whenever the bank refuses to lend the company money.

Question

Gavin Valencia

Business

29 April, 00:53

A bank reconciliation should be prepared when an employee is suspected of fraud. to explain any difference between the depositor's balance per books with the balance per bank. by the person who is authorized to sign checks. whenever the bank refuses to lend the company money.

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Daniel Costa · Answer 1

to explain any difference between the depositor's balance per books with the balance per bank

Explanation:

The goal of this process is to ascertain the differences between the banks records and the depositor's records and make accounting changes as deemed appropriate. There is a general flow that is used to make the correcting entries:

1. The process flow starts with the bank's ending cash balance

2. Add any deposits made by the company to the bank that are in transit

3. Deduct any cheques that are uncleared by he bank

4. Add or deduct any other items available as necessary

5. In the company bank records, once again start with the ending balance

6. Deduct any bank service fees, penalties and NSF (Non-Sufficient Funds) cheques.

7. Add interests earned

At the end of this process, it is likely that both accounts would be equal and tally.