is there any body who knows the meaning of bank reconcilation system?

Answer 1

You record your bank entries in your cash book (or whatever name you call it). The bank sends you a bank statement after the end of each month. Usually due to timing differences (you issued a cheque on the 30th, so it's entered in your cash book but the payee hasn't presented the cheque, so it wou't appear in the bank statement), bank charges, errors on either side, etc, the 2 balances won't match. That's why you do a bank reconciliation. Here are some sites with good explanations and illustrations for you.