Accounting Fundamentals Certification (AFC) Practice Test 2025 – The Comprehensive All-in-One Guide to Exam Success!

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Which method is used to match a checkbook balance with the bank balance?

Cash flow statement

Bank reconciliation

The method used to match a checkbook balance with the bank balance is bank reconciliation. This process involves comparing the balance in an individual or business's checkbook or accounting ledger to the balance reported by the bank in the account statement. The goal of bank reconciliation is to ensure that both records agree, identifying any discrepancies such as outstanding checks, deposits in transit, or bank fees.

Bank reconciliation is essential in maintaining accurate financial records. It helps to spot errors or unauthorized transactions, ensuring proper cash management. By regularly performing bank reconciliations, individuals and businesses can better control their finances and avoid issues such as overdrafts or misreported income and expenses. This method is a common practice in accounting and finance that supports accurate financial reporting and strengthens internal controls.

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Trial balance preparation

Financial review

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