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I’m new to the accounting field and I’m finding some difficulty understanding the purpose of the reconciliation statement. I understand that it helps keep the business and supplier on the same page, but I cant seem to understand why the balance per payable statement on the reconciliation statement must equal to the amount due on the statement of account. And how do you know if the amount should be added or subtracted on the reconciliation statement? Sorry for the basic question.
In the reconciliation you are comparing information from two sources so that accuracy can be checked.
Prima facie, the company’s records should be correct as they are up to date for invoices received and payments made to suppliers. Any differences between the company’s balance and the supplier’s should be explained by timing differences.
If a supplier has just recorded an invoice sent, but that jas not arrives yet, the invoice needs to be subtracted form the supplier’s version.
If the supplier has just been paid, the money might not have got there yet, so to bring the balance up to date, the payment would be deducted from the supplier’s version.
This should bring the balances into agreement. If not, it implies one or other party has made an error and this has to be sought out and corrected.
Dear sir/ Madam
Actually the one is asking about reconciliation not just about bank reconciliation could u please provide me with information about reconciliation of payable ledger control account and recieveble ledger control account if more about reconciliation of supplier statement
Your thankfully
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