What is the purpose of reconciling a bank statement?

The purpose of reconciling a bank statement is to find mistakes and ensure accuracy in records. This process involves comparing the bank's records of your transactions with your own accounting records to identify discrepancies, such as errors in deposits, withdrawals, or banking fees. By doing this, you can confirm that your account balance matches the bank's records, ensuring that any errors in accounting are caught and corrected promptly. Accurate reconciliation is essential for personal finance management and helps prevent fraud or financial misunderstandings in both personal and business accounts.