Reconciliation (accounting)
Encyclopedia
In accounting, reconciliation refers to a process that compares two sets of records (usually the balances
of two accounts) to make sure they are in agreement. Reconciliation is used to ensure that the money leaving an account matches the actual money spent, this is done by making sure the balances match at the end of a particular accounting period.
Well reconciliations refers to two sets of records (what is being put in the well compared to what actual costs are being spent). Each account is given a work breakdown structure
number]] (WBS) that will determine the cost of the well. The two numbers are compared to assure that they balance at the end of the accounting cycle. There is usually a difference.
There are, in general, five types of general ledger accounts that the typical business accounting system deals with: Asset, Liability, Equity, Revenue and Expense. Income Statement (Revenue and Expense) accounts eventually get closed out into an Equity account called Retained Earnings at the end of the fiscal year and their balances start over again at zero. Balance Sheet accounts (Asset, Liability & Equity), however, continue to roll their balances from period to period and year to year.
To ensure the reliability of the financial records reconciliations must, therefore, be performed for all Balance Sheet accounts on a regular and ongoing basis. A robust reconciliation process improves the accuracy of the financial reporting function and allows the Finance Department to publish financial reports with confidence.
Balance (accounting)
In banking and accountancy, the outstanding balance is the amount of money owed, , that remains in a deposit account at a given date, after all past remittances, payments and withdrawal have been accounted for. It can be positive or negative ....
of two accounts) to make sure they are in agreement. Reconciliation is used to ensure that the money leaving an account matches the actual money spent, this is done by making sure the balances match at the end of a particular accounting period.
Well reconciliations refers to two sets of records (what is being put in the well compared to what actual costs are being spent). Each account is given a work breakdown structure
Work breakdown structure
A work breakdown structure , in project management and systems engineering, is a deliverable oriented decomposition of a project into smaller components. It defines and groups a project's discrete work elements in a way that helps organize and define the total work scope of the project.A work...
number]] (WBS) that will determine the cost of the well. The two numbers are compared to assure that they balance at the end of the accounting cycle. There is usually a difference.
There are, in general, five types of general ledger accounts that the typical business accounting system deals with: Asset, Liability, Equity, Revenue and Expense. Income Statement (Revenue and Expense) accounts eventually get closed out into an Equity account called Retained Earnings at the end of the fiscal year and their balances start over again at zero. Balance Sheet accounts (Asset, Liability & Equity), however, continue to roll their balances from period to period and year to year.
To ensure the reliability of the financial records reconciliations must, therefore, be performed for all Balance Sheet accounts on a regular and ongoing basis. A robust reconciliation process improves the accuracy of the financial reporting function and allows the Finance Department to publish financial reports with confidence.