Question

Subscribe Going to the Net, Chapter 6 Go to What's a reconciliation? Answer these questions. 1. What is a reconciliation? 2. How does reconciliation work? 3. When should you reconcile? Going to the Net, Chapter 7 1. On the QuickBooks Resource Center, read the Accounting 101 for Small Business article 2. Link to the first chapter and second chapter, Write a brief explanation. (As of this writing, number 1 is about the income statement (P&L); number 2 is about accrual accounting.) Rubrics Discussion Rubric

Answer 1

1. Reconciliation is the process of finding differences between two or more activities . when same process takes places in both or more activities but each process gives different output then there is a need of reconciliation i.e finding out the differnces.

For eg. bank balance reconciliation between our bank books and passbooks issued by banks.

2. we should reconcilie in a manner that puts the user in a place that he can understand the reasons of differnce . In reconciliation we take one balance as a base then adding or lessing things which treated differntly in both activities for reaching to the balance of the other activity.

3. Reconciliation is required when the balances are different in both the activities , for say the bank balance as per books of entity shows $ 1000 while passbook  shows balance $ 800 then we should reconcile to find the differnce of $ 200.