Massachusetts Real Estate License Practice Test

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Study for the Massachusetts Real Estate License Test. Prepare with multiple choice questions and explanations. Ace your exam with comprehensive practice!

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What does reconciliation in banking refer to?

Investigating fraudulent transactions
Adjusting records against a bank statement
Balancing cash registers at the end of the day
Closing bank accounts properly

The correct answer is: Adjusting records against a bank statement

Reconciliation in banking specifically refers to the process of adjusting records against a bank statement. This involves comparing the transactions recorded in a business's books (like a ledger) with the transactions listed on the bank statement to ensure they match. Any discrepancies found during this process may indicate errors or discrepancies that need to be resolved. This practice not only helps in maintaining accurate financial records but also aids in identifying any unauthorized transactions, mistakes, or potential fraud. This is essential for effective financial management and maintaining the integrity of financial records. The other options pertain to different aspects of banking and financial management, such as investigating fraud, cash register balancing, or proper account closure, but they do not accurately capture the specific meaning of reconciliation in the banking context.