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                                                Party Reconcilation

Business Solution


1. Vouching

2. Journal Entry

3. Bank Reconciliation

4. Party Reconciliation (Debtors & Creditors)

5. Sales, purchase, payment, receipt, debit note, credit note

6. Inventory

7. Costing

8. Cost centres (project wise)

9. Preparation and finalisation of P/L & B/s…etc various things

                                                             Party Reconcilation

Party Reconciliation is an accounting process to help us to verify the balance so that our account remains tally and no further mistakes are made.

Reconciliation is an accounting process that helps to check and compare two sets of records that the figures are correct.

It also verifies that our ledger accounts are free of errors, are accurate and complete. However, reconciliation can be used for individual purposes in addition to business purposes.

Account reconciliation is particularly useful for explaining the differences between two financial records. Some variation may be acceptable at the time of receipt and payment. Unexplained or mysterious discrepancies, however, may warn of fraud or cooking the account of statement. Businesses and individuals can reconcile their records daily, monthly, half yearly or annually.

Key Take A Ways

  1. In double-entry accounting, each transaction is posted as a debit and a credit.
  2. Individuals can also use account reconciliation to check the accuracy of their accounts.
  3. Companies use the solution to prevent balance sheet and profit loss errors in their financial accounts, investigate fraud, and reconcile the general ledger.

Types of Reconciliation

Personal Reconciliation: –

From time to time, many individuals reconcile their check book and credit accounts by comparing their written checks, debit card receipts, and credit receipts to their bank and credit statements. This type of account reconciliation makes it possible to decide whether money is being withdrawn fraudulently or not.

By reconciling their accounts, one also ensures that financial institutions (FIs) have not made any errors in their accounts, and it gives consumers an overall picture of their spending. When a books is reconciled, the transaction details must match the records of the account holder. For a checking account, it is important to keep track of pending deposits or outstanding checks.

Business Reconciliation: –

Companies must reconcile their accounts to prevent balance sheet errors, prevent fraud, scrutiny, and avoid negative opinions from auditors. Companies generally reconcile the balance sheet every month after the previous month’s books are closed. This type of account reconciliation involves reviewing all balance sheet accounts to ensure that transactions were appropriately booked into the correct general ledger account. It may be necessary to adjust journal entries if they were booked incorrectly.

Some reconciliation is necessary to ensure that cash inflows and outflows match between the income statement, balance sheet, and cash flow statement. GAAP requires that if the straight method of presenting the cash flow statement is used, the company must still reconcile the cash flows in the income statement and balance sheet. If the indirect method is used, the cash flows from the operating section are already presented as a reconciliation of the three financial statements. Other solutions convert non-GAAP measures, such as earnings before interest, taxes, depreciation and amortization, into their GAAP-approved equivalents.