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What Is The Importance Of Reconciliation Of Financial Transactions?

This is a very important topic for accounts and finance students and they must know it in detail to understand it in a comprehensive way. By availing Reconciliation of Financial Transactions Assignment Help your problem solving ability will improve and you will be able to solve the complex problems also with great ease. Let us see the importance of this topic.

  • Reconciliation of financial transactions is the process of checking and ensuring that the balances of two accounts or you can say two records should be in agreement with each other.
  • It is a very important concept from the point of view of accounts and finance fields as it helps in matching that the actual amount of money leaving a particular account is equal to the amount spent. So therefore balances at the accounting period needs to be matched.
  • If the balances don’t agree then there are definitely certain errors in recording or certain transactions may have been left out. So it helps in comprehensive checking and correct reporting of financial transactions.
  • It will immediately help in highlighting the mistakes and reporting of fraudulent activities due to which the balances may be unable to match.
  • It also provides an easy means of overall evaluation of financial transactions so that the current position and performance of the organization can be understood.
  • Reconciliation is generally done for the following accounts such as bank accounts, cash balances, debt accounts, accounts receivable, accounts payable etc.
  • Reconciliation of financial transactions help to report all the errors and steps can be taken for immediate rectification where the discrepancies are found.

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