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What is the primary purpose of a bank reconciliation?

  1. A To calculate interest earned
  2. B To agree the cash book balance with the bank statement and identify differences
  3. C To prepare the income statement
  4. D To value closing inventory
Answer

To agree the cash book balance with the bank statement and identify differences

It identifies timing differences such as outstanding cheques and deposits in transit, plus errors and unrecorded bank items, so cash is stated correctly.

All Accounting MCQs

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