Benefits of Bank Reconciliation Statements

Steps:

• Recall key benefits: detects errors, reconciles timing differences, identifies fraud, and ensures accurate cash reporting.
• Evaluate statement 1: Matches company's books to bank records, a core benefit for accuracy.
• Evaluate statement 4: Highlights unrecorded items like fees or deposits, aiding timely corrections.
• Confirm statements 2 and 3: Likely describe unrelated processes, not direct benefits.

Why C is correct:

• Bank reconciliation verifies cash balance per books against bank statement, per accounting standards, so only 1 (error detection) and 4 (outstanding items) qualify as benefits.

Why the others are wrong:

• A includes 2, which misstates reconciliation's role in non-cash adjustments.
• B repeats 1 and 4 but omits "only," implying more; incorrect as 2 and 3 fail.
• D selects 2 and 3, neither of which ties to reconciliation's error-spotting purpose.

Final answer: C