Cancelled checks

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1. It makes sense to feel that tracing cancelled checks to the bank statement might seem redundant, especially since they’ve already been cashed and cleared. However, there are a few reasons why your manager might insist on this step:

   1. Reconciliation: Tracing cancelled checks to the bank statement is a crucial part of the reconciliation process. It helps ensure that both your financial records and the bank’s records are aligned. Any discrepancies could indicate issues such as Accounting errors or unauthorized transactions.

   2. Verification: While the cancelled check indicates that it has been processed, confirming it against the bank statement provides an additional level of verification. This step ensures that the amount, date, and payee match your records and the bank’s.

   3. Auditing and Compliance: Maintaining thorough records by tracing cancelled checks to bank statements can help during audits or compliance checks. It demonstrates thoroughness in your financial practices and ensures that all transactions have been accounted for properly.

   4. Error Identification: There could be times when a check may be cashed for a different amount or by someone who shouldn’t have access to it. By tracing it back to the bank statement, you can catch such errors early on.

   In summary, while tracing may feel unnecessary at times, it serves vital purposes in ensuring accuracy and integrity in your financial reporting.

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