 Hello, in this lecture we will define bank reconciliation according to fundamental accounting principles while 22nd edition the definition of bank reconciliation is report that explains the difference between the book company balance of cash and the cash balance reported on the bank statement for purposes of computing the adjusted cash balance. In essence, what we are going to do here is we're going to take the bank statement usually a monthly bank statement as of the end of the month and compare that to what we have in the books why do we do that because the bank is really a second recording a third party recording of our entire cash account the cash accounts being one of our most important accounts therefore if we can tie out what the bank has reported to what we have been reported we have one of the best and most secure checks to the fact that we have been recording cash correctly. So for example we might have the bank statement in this case at the end of February showing the beginning balance showing.