The word "to reconcile" means literally to exchange, to bring into a changed relationship. The great doctrine is the reconciliation of God and men, but the question to be decided is whether it is God who is reconciled to men, or men who are reconciled to God, and different schools of theology emphasize one side or the other. The word "reconcile" has a double meaning and usage, and the context must in each case determine how it is to be taken. All the other instances are in Paul's Epistles ( Romans 5:10 1 Corinthians 7:11 2 Corinthians 5:18-20, the verb Romans 5:11 Romans 11:15 2 Corinthians 5:18, 19, the noun Ephesians 2:16 Colossians 1:22, the compound). In the last case, Matthew 5:24, the word is not used in a doctrinal sense, though its use is very helpful in considering the force of the other terms. Rek'-on-sil, rek-on-sil-i-a'-shun (katallasso, katallage, also the compound form apokatallasso once the cognate diallassomai is used in Matthew 5:24): For example, she matches the total in the payables detail report to the ending balance in the trade payables account this means that she can give a copy of the payables report to the auditors as proof that the ending balance in the trade payables account is correct.Īs another example, the controller maintains a list of the prepaid expenditures recorded in the prepaid expenses asset account, and adjusts this list at the end of each month for any additions to the account, as well as deductions for items in the account that have been charged to expense.International Standard Bible Encyclopedia RECONCILE RECONCILIATION
This involves collecting documentary evidence concerning the amounts stated in each account. Examples of Reconciling an AccountĪ company controller wants to reconcile all balance sheet accounts at the end of the year, so that their ending balances can be justified to the auditors.
Once identified, management can implement controls to minimize the risk that these expenditures will be made again. When this situation arises, companies are more likely to issue check payments and then find that they have overdrawn their accounts, resulting in either overdraft fees or bounced checks.Īccount reconciliations are also useful for spotting instances of inappropriate purchases. If not, a common outcome is for many asset accounts to be overstated, requiring a business to charge off significant amounts at year-end to more accurately align these accounts with reality.Īn account reconciliation is especially important for bank accounts, since one might incorrectly assume that a cash balance is higher than is really the case. Advantages of Account ReconciliationsĪccount reconciliations should be conducted regularly, to ensure that the account balances appearing in a firm’s balance sheet are correct. It is also a key task to be completed before an organization’s books are audited at the end of each year. The concept is most commonly associated with the bank reconciliation, where a company’s recorded cash balance is compared to the bank’s end-of-month bank statement and adjusted as necessary to make the two balances match. An account reconciliation is the actions taken to prove that an account balance is valid.
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