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What is meant by reconciling an account?

What is meant by reconciling an account?

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Reconciling an account means documenting an account balance is correct or not. Reconciliation ensures that an account balance is correct.The objective of reconciling an account is to report the correct balance in the account so that the financial statement of company reflects true and fair view of the affairs of company during a particular financial year. For example, we reconcile the general ledger cash account with the balance shown in bank statement. For this, we normally prepare "Bank reconcilation statement" at the year end to match balance between cash account and bank account.The balance in Utilities Payable is also reconciled by computing the daily cost of each utility that the company used.

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