What is a bank reconciliation statement. Why is it prepared?

Explanation

Bank Reconciliation Statement Bank Reconciliation Statement could be a statement ready to reconcile the distinction between the balances as per the bank column of the money book and pass book on any given date.A bank reconciliation could be a method that explains the distinction between the bank balance shown in associate organisation's statement, as provided by the bank and also the corresponding quantity shown within the organisation's own accounting records at a selected purpose in time. during this method,we can say that to reconcile the balances of money book and pass book, a press release is ready that is termed the 'Bank Reconciliation Statement'.
Need of getting ready Bank Reconciliation statement it's neither mandatory to arrange Bank Reconciliation Statement nor a date is mounted on that it's to be ready.It is ready from time to time to visualize that each one transactions concerning bank area unit properly recorded by the bourgeois within the bank column of the money book and by the bank in its ledger account.It is typically practised that once a comparison is created between the bank balances as shown within the firm's money book, the 2 balances don't tally.
Hence,we have to 1st ascertain the causes of distinction thence and so mirror them in an exceedingly statement referred to as Bank Reconciliation Statement.IN this thanks to reconcile (tally) the 2 balances.Bank Reconciliation Statement is ready.If the 2 balances disagree, the entries in each the books area unit compared and also the things on account of that the distinction has arisen area unit observed with the individual amounts concerned in order that the bank reconciliation statement is also ready. during this method, bank reconciliation statement helps in police work, if there's any error in recording the transactions and ascertaining the right bank balance on a selected date.