What is the primary purpose of a bank reconciliation?

The primary purpose of a bank reconciliation is to account for timing differences in cash records. This process involves comparing the cash balance reported in a company's accounting records with the balance reported by the bank in its statements. There can be discrepancies due to various timing issues, such as outstanding checks that have not yet cleared the bank or deposits made late in the accounting period that are not reflected in the bank statement.

Performing a bank reconciliation allows a business to identify and rectify these differences, ensuring that the financial records accurately reflect the cash available. This is crucial for maintaining accurate financial statements, managing cash flows effectively, and ensuring the integrity of the accounting process. By resolving these timing differences, a business can prevent issues with cash management and budgeting.

While the other options could relate to aspects of financial management, they do not capture the essential purpose of a bank reconciliation, which is primarily concerned with ensuring the accuracy and reliability of cash records in relation to the bank's records.