Your Ask Joey ™ Answer

What does it mean to perform an account reconciliation?

Performing an account reconciliation means that you compare two sets of information in the accounting records and make sure that it agrees (i.e. the balance is the same or there is an immaterial difference).

One of the most common reconciliations that should be performed on a monthly basis is a bank reconciliation. Bank reconciliations are used to determine differences that have been reported between a company’s cash balances and the amounts reported by the bank.

The visual below illustrates what items need to be adjusted for the bank statement and what items need to be adjusted for in the accounting records:

Back To All Questions

You might also be interested in...

  • Three Reasons to Become an Accountant

    If you’re someone who is intrigued by numbers, enjoys problem-solving and wants to help others, then accounting might be the perfect career for you. While some people may be put off by its unalluring reputation, accounting is an excellent career choice that has many benefits. In this article, we look at three of the reasons...

  • Qualified Retirement Planning: Tax Advantages & Disadvantages

    Home Advantages and Disadvantages of Tax-Free and Deferred-Tax Retirement Plans What are “qualified retirement plans” and how can they be effective for tax planning? Well, there are plenty of tax savings advantages to individuals contributing to tax-free retirement accounts, as well as tax-deferred retirement accounts. However, this doesn’t necessarily mean that there are no disadvantages...

  • CPA Evolution Survival Guide

    Download Your eBook by selecting the download icon in the top right-hand corner