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Generally, we do not expect the amount in the client’s accounting system for a cash account...

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Accounting

Generally, we do not expect the amount in the client’saccounting system for a cash account (e.g., operating cash balanceas of 12/31/18 = $508,219.33) to match the amount that thefinancial institution confirms (e.g., “our records show that yourclient’s 12/31/18 bank account was $478,921.54). Why do wegenerally not expect the financial institutions to confirm theexact amount reported in the client’s accounting system? Anotherway of asking this question is: Why are there reconcilingdifferences between the client and financial institution’srecords?

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3.8 Ratings (518 Votes)
The cash account in the books and the bank balance as per financial institutions record often do not tally and there exist some differences that are to be reconciled Some of the    See Answer
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