IS ACCOUNTING A LIFE SKILL?: 01

RECONCILIATION: Making Sure All Your Charges are Correct

How many times have you heard or maybe used the phrase “are we on the same page?”. The purpose of this question is to find out whether all parties concerned have the same or correct information, in other words are all parties in agreement?. This is just another example of reconciliation in an everyday setting.

When is this principle useful as a life skill? Most people like to know how much money they currently have, which means they check it on a regular basis to verify charges. Think about it: when was the last time you logged into your bank account? What were you there for?Chances are you were checking the balance and looking to see that all the charges were correct. In the accounting world, this is known as reconciliation. Accountants use two sets of records to ensure that the money balances at the end of a recording period. You are reconciling by using receipts or check registers to make sure that everything that cleared your bank account matches what you have for your spending.

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Sources:Why is Accounting Important in Everyday Life?, ECPI University, June 5, 2017