what is an account reconciliation?

Question

I have to prepare an account reconciliation and i need an excel presentation if possible, i'm lost, thank you for helping me

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Answer 1

What are you trying to reconcile? The bank statement bal. to your cash book bal.? The AR listing bal. to the control a/c bal.? The creditor's statement of a/c bal. to your AP subsidiary ledger bal.? There are all sorts of reconciliations in accounting. If you can be more specific, I might be able to help you.

Answer 2

The cash account is an asset. All asset accounts have a normal debit balance therefore if you use a Tchart with debits on the left and credits on the right there would normally be a number on the left. All expense accounts are liabilities and thus normally having a credit balance on the right side of a Tchart. When you are trying to decrease an asset account (cash) you would have to credit the account or make an entry to the right side of the Tchart. To increase an expense account you would have to make an entry into the left hand side of the Tchart or debit that account. Thus what this journal entry is doing. Maybe try thinking about it as debits are positive credits are negative. Assets are debits and liabilities are credits. In order to decrease an asset account you would have to add a negative number (credit) to the equation. I know its confusing at first but once you get it it will come like second nature. I should know I have a masters in Accounting!