Which of the following statements about bank reconciliation is correct?

• A. Bank reconciliation is only necessary for businesses, not individuals.
• B. Bank reconciliation should be performed only once a year.
• C. Your financial institution can't help you if there is a mistake on your bank account statement.
• D. If you find a mistake on your bank account statement, you should contact your financial institution to resolve the issue.

Answer: (D)

Verified step by step guidance

1. Understand the purpose of bank reconciliation: Bank reconciliation is the process of comparing the bank statement with the company's or individual's accounting records to identify and resolve any discrepancies.
2. Clarify the frequency of bank reconciliation: Bank reconciliation should be performed regularly, typically monthly, to ensure the accuracy of financial records and to detect any errors or fraudulent activities promptly.
3. Evaluate the role of financial institutions: Financial institutions can assist in resolving errors or discrepancies found on a bank statement. It is important to contact them if a mistake is identified.
4. Analyze the incorrect statements: The first three statements are incorrect because (1) bank reconciliation is necessary for both businesses and individuals, (2) it should be performed more frequently than once a year, and (3) financial institutions can indeed help resolve mistakes.
5. Conclude with the correct statement: The correct statement is that if you find a mistake on your bank account statement, you should contact your financial institution to resolve the issue.