Why are bank reconciliations a good internal control?
A)Bank reconciliations allow the company to update the Cash account to equal the bank balance.
B)Bank reconciliations compare actual assets existing at the bank with accounting records.
C)Bank reconciliations allow the bank to update its cash to agree to the company's accounting records.
D)Bank reconciliations are not part of the internal control system.

Question

Quizplus · Accepted Answer

Bank reconciliations compare actual assets existing at the bank with accounting records, therefore helping to ensure that there are no discrepancies or irregularities in the company's financial records. This is a good internal control measure as it can detect errors or fraud in a timely manner, which can prevent financial losses or harm to the company's reputation.

Why Are Bank Reconciliations a Good Internal Control