A company considers bank reconciliation statements as its fundamental accounting document with the help of which it can analyze and maintain every dealings or transaction with the bank. Some of its important factors are as follows:
Composing a bank reconciliation statement is considered as an important and effective maintenance technique. With its help, a company can curb any financial misconduct pursued by corrupt staffs and control such situations by utilizing effective measures for such loopholes. This statement also intercepts any swindling in bank drafts, cheques, or in any other kind of bank transactions.
As the information provided in these books meets the management requirement of a company, comparison of both these record books are considered necessary. Both the cash books and pass books are maintained properly, and in case of any errors, while posting the entries, they are recognized and corrected.
When regular comparisons are made with the help of pass book and cash book, a company can keep a track on their transactions and also keep tabs on their employees. These checks are of great help in finding those members of staff who misuse company funds or indulge in fraudulent activities. As these statements are made at frequent intervals (daily, weekly, monthly), firms with the help of both books, can monitor and compare regularly to check for fraud and theft of funds.
With the help of cash book and pass book comparison, you can find the cash depositing date recorded by the bank and also the clearance date of it. If the delay is of a notable period, then one can investigate the reason for it and go for corrective measures to resolve the issue.
Only after a proper comparison between the records and information of pass book, with the details in cash book is the bank reconciliation statement composed.This contrasting information helps in pin pointing and revealing any differences in entries between pass book and cash book that might have been entered by mistake or might have got omitted.
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