What causes bank reconciliation not to balance?

Bank reconciliation may not balance due to various reasons. Timing differences can arise when transactions occur near the statement cutoff date but are not yet processed by the bank. Errors in recording transactions, such as data entry mistakes or omissions, can lead to discrepancies. Additionally, outstanding checks or deposits in transit can create differences between the bank statement and the company’s records. Bank fees, interest, and adjustments might not be accurately reflected on both sides. Fraudulent activities or unauthorized transactions can also cause discrepancies. Finally, differences in the treatment of transactions, like accounting for them in different periods, can result in imbalances. Resolving these issues often involves reviewing transactions, communicating with the bank, and adjusting records to ensure accurate reconciliation and financial reporting.

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