What process is used to explain discrepancies between a bank statement and an individual's record?

• A. Financial Audit
• B. Bank Statement Reconciliation
• C. Cash Flow Analysis
• D. Account Review

Answer: (B)

The process that is used to explain discrepancies between a bank statement and an individual's record is bank statement reconciliation. This process involves comparing the transactions and balances in the individual's financial records with the bank's records. Any differences—whether due to outstanding checks, bank errors, or timing differences in deposit posting—are identified and resolved to ensure that both records align. Bank statement reconciliation is crucial for maintaining accurate financial records and detecting any potential fraud or errors, providing a clear picture of one's financial situation. It's a systematic approach that leads to greater financial accuracy and accountability.