Why reconcile general ledger accounts?

A company's general ledger shows the detail of all the company's transactions during a given period. Proper reconciliation of general ledger accounts involves reviewing general ledger entries to source documents for accuracy. Reconciling general ledger accounts is not limited to cash accounts; all accounts should be reconciled to ensure proper posting.

Electronic BankingThe increasing frequency of electronic bank activity makes reconciling a necessity. Reconciling accounts on a regular basis ensures that all bank activity has been recorded. Unusual TransactionsReconciling accounts allows the bookkeeper to become familiar with the typical general ledger transactions.

When an unusual transaction occurs and has not been correctly recorded in the general ledger, reconciling the accounts will allow bookkeeping staff to inquire about the transaction and record it correctly. Posting ErrorsGeneral ledger activity may be misposted during the regular course of the workday. Reconciling the ... more.

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