- 1 Marks
Question
The primary purpose of performing bank reconciliations in accounting is to:
A. Ensure that the balance in the cash at bank account and the balance shown in the bank statement are always the same
B. Identify and correct errors in accounting records related to cash transactions with the bank
C. Combine the cash book balance with the bank statement balance to get the total cash position
D. Reconcile the balances of other accounts in the general ledger with the bank statement
E. Verify the accuracy of non-cash transactions in the accounting records
Answer
Answer: B
Explanation: The correct answer is B. The primary purpose of bank reconciliation is to identify and correct discrepancies between the cash balance shown in a company’s accounting records and the balance shown on the bank statement. This process helps detect errors, unrecorded transactions, or potential fraud.
- Tags: Accounting Controls, Bank Reconciliation, Cash Management
- Level: Level 1
- Topic: Bank reconciliations
- Series: MAY 2024
- Uploader: Dotse