What is the first step in reconciling the end-of-month bank balance?

Beginning with the end-of-month bank balance is crucial for the reconciliation process. This balance serves as the starting point to ensure that the recorded cash balance in the company's accounting records matches the amount reported by the bank.

By starting with the end-of-month bank balance, you can systematically account for all transactions that have occurred during the month. This includes adding any deposits that the bank has not yet processed and subtracting outstanding checks that have not yet cleared. Having a clear starting point also helps to identify discrepancies more easily and ensures that the reconciliation process is thorough and organized.

The other options, while they play a role in the overall reconciliation, come after establishing this starting point. Reviewing outstanding checks can help identify why there might be a difference between the bank's records and your own, but it must be done in relation to the initial figure from the bank statement. Thus, starting with the end-of-month bank balance is essential to effectively reconcile and provide clarity in the accounting records.