What is Reconciliation?

The task entails comparing two pieces of data, one created internally and the other by a third party such as a bank, supplier, or customer, and ensuring

The process of comparing two sets of records to ensure that the figures are correct and in agreement is known as reconciliation. Additionally, reconciliation ensures that the general ledger accounts are consistent, accurate, and complete. However, reconciliation can be used for personal as well as business purposes.

Account reconciliation is especially useful for demonstrating the difference between two financial records or account balances. Some variations may be acceptable due to the timing of payments and deposits. Unexplained or mysterious discrepancies, on the other hand, may indicate fraud or accounting tampering. Individuals and businesses can reconcile their books on a daily, monthly, or annual basis.

There is no standard procedure for performing an account reconciliation. However, GAAP requires double-entry accounting, which requires a transaction to be recorded in two places in the general ledger and is the most commonly used tool for reconciliation.
Because it detects errors on both sides of the entry, double-entry accounting is a useful method of reconciling accounts. In double-entry accounting, which is widely used by businesses, every financial transaction is recorded in two accounts, the credit account and the debit account.

One account will be charged, while the other will be credited. When a business sells something, it deducts cash or accounts receivable from its balance sheet and credits sales revenue (on the income statement).
There is no standard procedure for performing an account reconciliation. However, GAAP requires double-entry accounting, which requires a transaction to be recorded in two places in the general ledger and is the most commonly used tool for reconciliation.
Because it detects errors on both sides of the entry, double-entry accounting is a useful method of reconciling accounts. In double-entry accounting, which is widely used by businesses, every financial transaction is recorded in two accounts, the credit account and the debit account.

One account will be charged, while the other will be credited. When a business sells something, it deducts cash or accounts receivable from its balance sheet and credits sales revenue (on the income statement).