Why is it necessary to record journal entries after the bank reconciliation has been prepared?

Why is it necessary to record journal entries after the bank reconciliation has been prepared? Which side of the bank reconciliation requires journal entries?

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Expert Solution

Step 1: Definition of the bank reconciliation statement

Bank reconciliation is a statement that shows the difference between a bank passbook and a company’s books. Bank reconciliation statement includes deposit, withdrawal, and other activities

Step 2: Necessary to record journal entries

The bank reconciliation is an accountant’s tool separate from the journals and ledgers. It does not account for transactions in the journal. All the items of the book side of the bank reconciliation requires journal entries because they are not recorded before the boan reconciliation statement. Hence, recording journal entris after the bank statement is necessary.

To get the transactions into the accounts, we must make journal entries and post to the ledger.

Sahil Dangi answered 1 year ago

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