What is the primary purpose of a bank reconciliation?

The primary purpose of a bank reconciliation is to find discrepancies between financial records and bank statements. This process involves comparing the transactions recorded in a business's accounting books with the transactions listed on the bank statement. Through this comparison, errors can be identified and corrected, which helps ensure that the accounting records accurately reflect the company's financial position.

Bank reconciliations are crucial for maintaining accurate financial records, as they help detect mistakes in bookkeeping, prevent fraud, and ensure that all transactions are accounted for. By recognizing differences between the two sets of records, businesses can investigate further to identify the cause of any discrepancies, such as outstanding checks, deposits in transit, or bank fees that may not yet be recorded in the accounting system. This ultimately supports better financial management and reporting.

Other options, while they are important aspects of financial operations, do not directly relate to the reconciliation process or its main goal of ensuring alignment between cash balances and accounting records.