There are a number of types of reconciliations, used to ensure account balances are accurate
Bank (cash)
Subledger (AP, AR, fixed assets)
The goal of a reconciliation to identify differences
between two source documents
The expectation is that the amounts would agree
If they do not, we need to know why
There are legitimate reasons for differences, not every difference requires
a journal entry
The key is to understand why there is a difference and then make an entry if required
Junior accountants often draft reconciliations.
Your reconciliations will be reviewed by your manager.
1 – As I mentioned before, reconciliations are often used to ensure balances are accurate
-Used quite broadly
2 – Basically two source documents are compared, to identify any differences
-Usually expect amounts would agree
-If not, we need to know why and understand if it is a legitimate reason
3 – Reconciliations also need to be reviewed, prior to any entries being made