Which document is primarily used to validate the bank and credit card account balances reported on a company's balance sheet?

• A. Cash flow statement
• B. Income statement
• C. Bank reconciliation statement
• D. Trial balance

Answer: (C)

Verified step by step guidance

1. Understand the purpose of the question: The goal is to identify the document that validates the bank and credit card account balances reported on a company's balance sheet.
2. Review the options provided: Cash flow statement, Income statement, Bank reconciliation statement, and Trial balance.
3. Analyze the function of each document: The Cash flow statement tracks cash inflows and outflows, the Income statement reports revenues and expenses, the Bank reconciliation statement compares the company's records to the bank's records, and the Trial balance lists all ledger accounts and their balances.
4. Focus on the Bank reconciliation statement: This document is specifically designed to reconcile the company's recorded balances with the actual balances reported by the bank, ensuring accuracy in the balance sheet.
5. Conclude that the Bank reconciliation statement is the correct answer because it directly validates the bank and credit card account balances reported on the balance sheet.