Need and Importance Of Bank reconciliation statement :

 

After tracing the various items of difference, a bank reconciliation statement is prepared. The following are its advantages in which lies its importance.

i. The errors that might have taken place in the cash book in connection with bank transactions can be easily found.

ii. Regular preparation of bank reconciliation statement prevents frauds.

iii. It indirectly imposes moral check on the accounting staff.

iv. By the preparation of bank reconciliation statement, uncredited cheque can be detected and steps can be taken for their collection.