Why Is Bank Reconciliation Statement Prepared?

A bank reconciliation gives a realistic bank balance where the statement that your bank sends you at the end of each month may not show activities like checks or deposits that were made after the cutoff date.  Bank reconciliations are a good way to doublecheck your own figures as well as the bank's.

It's a ledger or accounting of your transactions: Debits, credits, transaction fees etc.  It helps you to balance your account against what the bank has.  There is a month end cut off that you need to keep in mind when balancing.

Bring to agreement your book and bank balance......any discrepancy, whether a cash shortage or overage will call attention,....a material cash shortage may be due to theft....while cash overage may be due to mistakes on giving customers change....