An analysis that explains differences between the checking account balance according to the depositor's records and the balance reported on the bank statement is a(n):
A)Internal audit.
B)Bank reconciliation.
C)Bank audit.
D)Trial reconciliation.
E)Analysis of debits and credits.

Question

Quizplus · Accepted Answer

A bank reconciliation is the process of comparing a depositor's records of their checking account balance to the balance reported on the bank statement to identify any differences. The purpose of the reconciliation is to explain and identify any discrepancies between the two records, such as outstanding checks, deposits in transit, or bank errors. An internal audit is a broader examination of a company's financial records and controls, while a bank audit is an examination conducted by an external auditor specifically focused on the bank's financial statements and controls. A trial reconciliation is not a commonly used term in accounting, and an analysis of debits and credits may be a part of a bank reconciliation but is not a complete explanation of the process.

An Analysis That Explains Differences Between the Checking Account Balance