After you reconcile your bank statement, which of the following actions should you take?

• A. Record any necessary adjustments in your accounting records
• B. Ignore any discrepancies found during reconciliation
• C. Send the reconciled statement to the bank for approval
• D. Destroy the bank statement for confidentiality

Answer: (A)

Verified step by step guidance

1. Understand the purpose of bank reconciliation: Bank reconciliation is the process of comparing your accounting records with the bank statement to identify discrepancies and ensure accuracy in your financial records.
2. Identify discrepancies: During reconciliation, you may find differences such as outstanding checks, deposits in transit, or bank fees that are not yet recorded in your accounting system.
3. Determine necessary adjustments: Based on the discrepancies identified, decide which adjustments need to be made in your accounting records. For example, record bank fees, interest income, or correct errors in your books.
4. Update your accounting records: Make the necessary journal entries to reflect the adjustments identified during the reconciliation process. This ensures your books are accurate and match the bank statement.
5. Retain the reconciled statement: Keep the reconciled bank statement for your records as part of your financial documentation. It is not necessary to send it to the bank or destroy it; it serves as evidence of the reconciliation process.