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Importance of The bank statement
Bank sends out bank statements each month. It's significant that this statement and checking account balance balances. There are certain items about that bank isn't aware of: outstanding checks, deposits in transit, and others. Business may not be aware of some items from bank: service charges, bank collections, bank fees, and others.
These items will either be subtracted or added from the bank statement or check book. Two balances should balance.
Any adjustment to checkbook balance needs to have a journal entry. This amount then will be posted to the correct account.
illustrate business cycle with reference to a retail trader which does business on a cash basics
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