An accounting process used to compare two sets of records to make sure they agree with each other. This process is crucial to make sure the money spent matches the amount leaving the account. a. At the end of the month, you reconcile your checkbook and credit card accounts by comparing copies of checks, receipts, etc. with your bank statements. This helps determine whether fraudulent activity has taken place, no errors have been mad, shows your overspending and gives you an idea of your spending.

This is an equity account that reports the net income of a corporation less the dividends declared.