Reconciliation
A reconciliation compares two records of the same underlying balance and explains the differences. Its purpose is to establish the correct amount and identify errors, omissions or legitimate timing differences. Some differences require corrections to the business’s ledger; others need only an explanation. A reconciliation is a control process, not an instruction to change one record until it agrees with another.
Worked example
A bank ledger shows $1,250 while the bank statement shows $1,200. A $50 deposit recorded by the business has not yet been processed by the bank. This explains the difference; recording another receipt would duplicate the transaction.
Common mistake
First establish which record is wrong, if either. A bank or supplier statement can contain errors as well as the business’s own records.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | F1 | Direct | July 2027–August 2028 |
| ACCA | FA | Direct | September 2026–June 2027 |
| ACCA | K1 | Direct | July 2027–August 2028 |
| CIMA | BA3 | Direct | Official assessment-window verification pending |
| FIA | FFA | Direct | September 2026–June 2027 |