Ace the 2025 Certified Treasury Pro Test – Cash In on Your Future Brilliance!

Question: 1 / 400

Why is a bank reconciliation performed?

To balance the company's investment portfolio

To ensure cash records match with the bank's records

A bank reconciliation is performed primarily to ensure that the cash records maintained by a company align accurately with the records held by the bank. This process is crucial for identifying discrepancies between the company's ledger and the bank statements, such as outstanding checks, deposits in transit, or bank errors. By confirming that both sets of records correspond, the company can accurately assess its cash position, detect potential fraud, and maintain reliable financial reporting.

In accomplishing this, bank reconciliation helps safeguard the company’s financial assets, enhances the accuracy of financial statements, and supports effective cash management. It is a routine practice that contributes significantly to maintaining the integrity of accounting records and ensuring proper internal controls over cash flow.

Get further explanation with Examzify DeepDiveBeta

To close out the financial year

To calculate asset depreciation

Next Question

Report this question

Download Certified Treasury Professional Practice Exam PDF Study Guide
Subscribe

Get the latest from Examzify

You can unsubscribe at any time. Read our privacy policy