What purpose of Bank Reconciliation statement?

Bank reconciliation statement is statement which is prepared after reconciling the accounts as per company records to that of bank records. In others word it done to ensure the entries shown in company’s bank statement to that of company owns book record are same. This statement is prepared by your accountant or the book keeper in order to understand any differences between the balance in bank statement and the balance in accounting records.

• It confirms the accuracy of the balances shown in the company’s books and bank records.
• It provides a check on the accuracy of entries made in both the books and bank records.
• It detects and rectifies any error committed in records
• It gives indication to update the books if some entries not recorded.
• It helps to check undue delay in the collection and clearance of some cheques.

Bank accounts/ Number has two statements, Depositors and Bank account. Due to different cases like delay of withdrawing customers check (outstanding), delay of deposits to accounts of depositor(deposit in transit), errors by either party, debt or credit memos, collected of payments by banks on behalf of their customers. issuing of check above the balance of banks balance(NSF) may difference the balance of Book (Depositor)and bank accounts. Therefore bank reconciliation the process of reconcile these two accounts and prepared required journal entries following to the adjustments. 

Thank you for the invite and it is an interesting question.

A bank reconciliation is used to compare your records to those of your bank, to see if there are any differences between these two sets of records for your cash transactions. The ending balance of your version of the cash records is known as the book balance, while the bank's version is called the bank balance.

Bank reconciliations help uncover discrepancies in account records. Reconciling your bank account transactions with your monthly bank statement is known as a bank reconciliation. The process requires comparing your bank statement with your record of withdrawals, check payments, deposits and financial transfers.

Bank account reconciliations are both practical and critical cash control procedures. Completing one for each of your checking and saving accounts is one way to find errors or discrepancies and verify how much you have to spend or how much you've saved. Reconciliation statements are tools to achieve these goals.

Balance sheet accounts are usually the focus of reconciliations. These accounts include information about the company's assets and liabilities. Business managers use reconciliations as part of their cash management process. Bank reconciliations review company's internal cash information against the bank statement.

A company is encouraged to prepare a bank reconciliation are: Mandatory Procedure...

1. To be certain that the amount of cash reported on the company's balance sheet (and the balance in its general ledger Cash account) is the correct amount. The additions and deductions on the bank statement are compared (or reconciled) with the items that are entered in the company's general ledger Cash account. Some differences, such as outstanding checks and deposits in transit, are noted as simply timing differences.
2. Since most companies use double-entry accounting or bookkeeping, any omission or error in the company's general ledger Cash account also means that another general ledger account will have a corresponding omission or error. For example, if a company had wired money from its bank account for emergency computer maintenance services and had not recorded the credit to its Cash account, it is also omitting the debit to the account Computer Maintenance Expense. The bank reconciliation could prevent this company from issuing an incorrect balance sheet (incorrect Cash and incorrect Retained Earnings) and an incorrect income statement (expenses would be too low, net income would be too high).
3. Performing a bank reconciliation results in improved internal control over the company's cash if done by someone other than the employee(s) handling and/or recording receipts and payments. Having another person reconciling the bank statement is known as the separation or segregation of duties and it should reduce the odds of dishonest acts involving the company's cash.

The bank reconciliation is also referred to as the bank statement reconciliation or as the bank rec.

is a statement that depositors prepare to find, explain and understand any differences between the balance in bank statement and the balance in their accounting records.