the bank account majoni Ltd. for the month of December 2011 was as follows:

debits

01/12/2011 Balance b/d 15,245, 02/12/2011 Cash Lodgement 2,450, 05/12/2011 M. Kirby 6,000, 12/12/2011 T. Brennan Ltd. 3,553, 18/12/2011 Mulcahy Printers 2,000, 30/12/2011 Lodgement 3,540

Credits

02/12/2011 R. Patterson 5784 245, A. Harty 5785 348, M. McDonnell 5786 745, L. Sexton 5787 852, Rent D.D. 650, Cheque - Cancelled 5788 -, Bank Charges D.D. 25, Conlon Resources S.O. 500, F. Davies 5789 2,990, J. Roche 5790 1,640, Balance c/d 24,793

The following is the bank statement for majoni Ltd. for the month of December 2011.

Bank Statement for Majoni Ltd. for December 2011

Date Description Payments Lodgment Balance

01/12/2011 Balance 15,345

04/12/2011 Lodgement 2,450 17,795

05/12/2011 Cheque 5784 245 17,550

06/12/2011 73490 950 18,500

07/12/2011 Lodgement 6,000 24,500

12/12/2011 Cheque 5786 745 23,755

13/12/2011 Rent D.D. 650 23,105

14/12/2011 Credit Transfer 3,535 26,640

15/12/2011 Bank Interest 266 26,374

16/12/2011 Cheque 5787 825 25,549

17/12/2011 Bank Charges 25 25,524

18/12/2011 Electricity Supplier 435 25,089

19/12/2011 Conlon Resources S.O. 500 24,589

20/12/2011 Lodgement 2,000 26,589

21/12/2011 74521 600 25,989

23/12/2011 Telephone Company 212 25,777

27/12/2011 Cheque 5623 100 25,677

28/12/2011 Credit Transfer 7,450 33,127

31/12/2011 Bank Fees re Dishonoured Cheque 2 33,125

The bank has confirmed to majoni Ltd. that it made errors in Majonis bank account on the 6th December 2011 and 21st December 2011 amounting to ksh950 andksh600 respectively.

REQUIREMENT:

(a) Prepare the bank reconciliation statement for Majoni Ltd. as at 31st December 2011.

(b) Explain the rationale for preparing a bank reconciliation.

(c) Provide reasons for differences that may occur between the bank account and the bank statement