Why Is A Bank Reconciliation Statement Prepared?

Bank Reconciliation statement is basically a statement that is prepared by organizations for reconciling the balance of cash at the bank, in its own record with the statement prepared by the bank on a specific date.

Bank Reconciliation statement is prepared because it ascertains that any discrepancy in the records is because of an error rather than the timing of the entry. All the errors and mistakes made either in the cash book or the books of the bank are revealed. It also indicates the delays in the clearance of the outstation cheques.

Another important purpose of preparing this statement is that it discourages the staff from committing any embezzlement.