Need or Importance of Bank Reconciliation StatementBank reconciliation statement is an important technique by which the accuracy of the bank balance shown by the pass book and cash book is ensured. The need and importance of bank reconciliation statement can be summarized in the following points:
- Bank reconciliation statement ensures the accuracy of the balances shown by the pass book and cash book.
- It provides a check on the accuracy of entries made in both the books.
- It helps to detect and rectify any error committed in both the books.
- Bank reconciliation statement helps to update the cash book by discovering some entries not yet recorded.
- It indicates any undue delay in the collection and clearance of some cheques.
- A regular reconciliation discourages the staff of the customer or even that of the bank from embezzlement (fraudulent appropriation of funds)