Benefits of Preparing Bank Reconciliation Statement

Question 1

benefit

Answer 1

It enables missing entries in the cash book to be accounted for, which prevents errors in the financial statements (e.g direct debits , standing orders, debit card payments, credit transfers, dishonoured cheques and bank charges)

Question 2

benefit

Answer 2

It enables error on the bank statement to be investigated and notified to the bank for correction

Question 3

Benefit

Answer 3

It enables out-of-date cheques to be identified and cancelled in the cash book

Question 4

Benefit

Answer 4

It helps prevent fraud, as the bank statement is an independent accounting record prepared by the bank

Question 5

Benefit

Answer 5

It enables you to identify dishonoured cheques and seek repayment from customers

Question 6

Benefit

Answer 6

It enables errors in the cash book to be corrected, which also prevents errors in the financial statements (e.g. wrong amounts entered for cheque payments)