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reconsiliation account

what is the exact meaning of reconsiliation account?

what is the use of this account?

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    author's profile photo Former Member
    Former Member
    Posted on Jul 23, 2008 at 05:29 AM

    Hi

    Reconciliation account is an account for reconciling with some other accounts. Reconciliation is done for matching something with something.

    In SAP, reconciliation accounts are created for vendors, customers, assets, etc. Since these are separate subledgers, the transactions occured in them will not match with the general ledgers without a reconciliation account in General ledger. Hence a reconciliation account is maintained in general ledger area for these subledgers. Whatever transactions happening in these sub-ledgers are thus updated and reconciled with the general ledger.

    Hope you have understood.

    Regards,

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  • author's profile photo Former Member
    Former Member
    Posted on Jul 23, 2008 at 05:30 AM

    Hi,

    Reconciliation account are those account with subsidiary ledgers. This ensures the integration of the Subsidiary account to the general ledger account. Example of this accounts are Vendor and Customer reconciliation account. Every time transactions that involving vendor or customer, both subsidiary and reconciliation accounts were updated.

    Hope this helps.

    Thanks,

    Rod

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  • author's profile photo Former Member
    Former Member
    Posted on Jul 23, 2008 at 05:35 AM

    Hello,

    The word reconciliation is confusing in the given context of reconciliation account.

    In fact it is NOT reconciliation, rather it should be better known as u201CControlu201D Account.

    Any accountant knowing the erstwhile cost accounting would understand the meaning of word u2013 control.

    The purpose of this account is to link between general ledger and subsidiary ledger such as AR / AP.

    The balance appearing in so called reconciliation (control) account is the aggregate sum total of all the transactions (except down payments & other items) appearing in the AR / AP subsidiary ledger.

    Hope you got the point.

    Ambadas

    Edited by: Kodam AV on Jul 23, 2008 6:39 AM

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  • author's profile photo Former Member
    Former Member
    Posted on Jul 23, 2008 at 05:43 AM

    Hi

    Reconcilation account is nothing but subsidary account . it reconcile the total vendors or customers for example in the balance sheet we will make like total customer or total vendors means we have reconcile the all vendors or all customers ok at the same time we cant post directly to the reconcilation account

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  • author's profile photo Former Member
    Former Member
    Posted on Jul 23, 2008 at 06:13 AM

    Hi All

    Lot of replies from experts......

    Reconciliation is simple as it reconcile the sub ledger and main ledger....

    In the real time, it is difficult to maintain each GL account per vendor/customer/asset.

    For each vendor/customer, we have to create sub-ledgers (Master Data) and assign the reconciliation in respective master data of customer/vendor.

    These are to be grouped in Balance Sheet. So, In SAP, we have the concept of Reconciliation Account, which is main account.

    This Reconciliation account can be used by multi vendors or customers.

    When ever you make a transaction with vendor/customer, system will take reconciliation account from master data and post entries on real time.

    Rgds

    Satheesh Vallepu

    Edited by: satheesh babu on Jul 23, 2008 8:14 AM

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