Why is it important to review your checking account statement during the bank reconciliation process?

• A. To automatically update your checkbook register
• B. To avoid paying taxes on your account balance
• C. To identify errors or unauthorized transactions that may require correction
• D. To increase the interest rate on your account

Answer: (C)

Verified step by step guidance

1. Understand the purpose of bank reconciliation: Bank reconciliation is the process of comparing your checking account statement with your own records (e.g., checkbook register) to ensure accuracy and identify discrepancies.
2. Review the checking account statement: Carefully examine the transactions listed on the statement, including deposits, withdrawals, and fees, to ensure they match your records.
3. Identify errors or unauthorized transactions: Look for any discrepancies, such as incorrect amounts, duplicate charges, or transactions you did not authorize. These may require correction or further investigation.
4. Update your checkbook register: Adjust your records to reflect any legitimate transactions that were missing or incorrectly recorded in your checkbook register.
5. Contact the bank if necessary: If you find errors or unauthorized transactions, notify your bank promptly to resolve the issue and prevent further problems.