What is a reconciliation in accounting?

Answer 1

The above 3 answers are not wrong, but they deal with only the bank reconciliation. In real life, there are other types of reconciliation, e.g.,

Between the debtors listing total amt extracted from the debtors subsidiary ledger and the control amt in the General Ledger. This could be due to double-invoicing, or wrong posting (customer paid $100 but the clerk posted $200), etc

Between the creditors listing total amt extracted from the creditors subsidiary ledger and the control amt in the GL. Again, this could be due to taking up the wrong amt, omitting credit notes from supplier, clerical posting errors, etc.

Between the stocks quantities stated in your computer listing and the actual quantities in the warehouse. It could be due to theft by staff, or clerical error in keying in quantities purchased or sold.

As you can see, as long as you can obtain figures or amounts from 2 different sources, you may need to do a reconciliation to reconcile differences, if any. These differences will require investigation. A reconciliation acts as a check on accuracy.

Answer 2

The above is the right answer, and use the companies invoices to allow for anything which may have been paid and not cleared the bank. The invoices give a lot of information, which hopefully is reflected in the banks statements.
If the company has a loan with the bank, they have to provide documentation, etc., all the reconciliation before they can then go on.

Answer 3

It is to make sure that the balance between the cash at bank account and the balance on the bank statement. Also you will be cross referencing transactions on the bank statement with both cash payments and cash receipts journals. Finding any outstanding deposits or unpresented cheques.

Answer 4

is the process of matching and comparing figures from accounting records against those presented on a bank statement. Less any items which have no relation to the bank statement, the balance of the accounting ledger should reconcile (match) to the balance of the bank statement.

It allows individuals to compare their personal bank account records to the bank's records of the individual's account balance in order to uncover any possible discrepancies.