Today I will explain you the concept the reconciliation. In accounts reconciliation is very important and tally makes it much easier job
In Accounts reconciliation is done for the following kind of transitions
1) Bank Reconciliation
2) Party Statement reconciliation
3) Tds challans Reconciliation
In business receipts and payments are done through bank/cheques etc.
Now whenever a firm issues a cheque it is accounted in the books of account of Issuer Company immediately however the same may not be entered in the books of account of receiver party or the bank itself due to many reasons.
It results in mismatch of balance between the books of accounts of related parties on a particular date.
Let’s assume Red & White Bros have issued a cheque of Rs. 50K to its suppliers m/s Anmol brothers as on 30.04.2009.
M/s Anmol Bros. receives the cheque on date 2.5.2009 and deposit it to their