News Objectives, Advantages As Well As Importance Of Banking Enterprise Reconciliation Contestation (Brs)
Bank Reconciliation arguing is the basic document of the accounting. Preparation of it is non legally compulsory simply past times making it, next objects/advantages/importance are derived as well as is needed due to next causes:
1. To know the accuracy of entries inwards the Cash Book as well as the Pass Book: The basic object of preparing Bank Reconciliation Statement is to exam the acuracy of causes of divergence inwards the Cash Book as well as the Pass Book. The trader tests the accuracy on the dry reason of entries inwards the Cash Book as well as the Bank ori the dry reason of its ain transactions.
2. To know the errors inwards Cash Book as well as Pass Book: Cash inflow as well as springtime must tally asper, Cash Book alongside the Bank Pass Book or,Bank Statement. This brings into focus errors as well as irregularities inwards Cash Book as well as Pass Book also every mo inwards the business.
3. Knowledge of cheques deposited for collection: Bank Reconciliation Statement gives data nearly the position of cheques deposited for collection e.g.,
(i) How many cheques were issued as well as non presented for payment upward to the engagement of reconciliation?
(ii) How many cheques were non credited upward to the reconciliation fourth dimension or were dishonored,
(iii) Cause of delay, inwards clearance etc
4. Check on the embezzlement of cash: The continuous comparing of Cash Book alongside the Pass Book keeps cheque on employees trying to indulge inwards embezzlement as well as misappropriation of funds. The cases of embezzlement of cash past times employees tin endure detected easily.
5. Verification of Bank Balance: The balance of Bank tin endure known as well as it becomes convenient for issuing cheques on its dry reason inwards future.
6. Mechanism of Internal control: The grooming of Bank Reconciliation arguing is an of import machinery of internal command on cash inflow as well as outflow. It checks misappropriation of cheques, banking concern drafts, malpractices of dishonest employees dealing alongside cash as well as banking concern etc.
7. Knowledge of involvement allowed past times banking concern or Commission as well as Interest charged past times Bank: The information regarding transaction of involvement as well as other expenses (e.g., commission) which are recorded past times Bank, simply non recorded past times client inwards his Cash Book is received past times grooming of Bank Reconciliation Statement.
8. Knowledge of Other Facts:
• The noesis of incorrect entries past times bank;
• The right position of cash as well as banking concern deposit;
• Dividend straight collected past times bank;
• Direct deposit of cash or cheque past times a debtor;
• Payment made past times the banking concern on behalf of trader every mo per standing instructions;
• Position of dishonor of bills receivable.