What is used to validate the bank and credit card account balances on a balance sheet?

The use of reconciliation reports is essential in validating bank and credit card account balances on a balance sheet. Reconciliation is the process of comparing two sets of records to ensure they are in agreement, which in this case involves matching the balances recorded in the company's accounting system with the balances shown on the bank and credit card statements.

Reconciliation reports provide a detailed summary that outlines any discrepancies between these accounts. For example, if a transaction is missing from the accounting records or if there is a difference in amounts due to errors, the reconciliation report will highlight these issues. By systematically reviewing these differences, businesses can ensure their financial statements accurately reflect their true financial position, making reconciliation reports vital for maintaining the integrity of financial reporting.

The other options do not fulfill the same role as reconciliation reports. Bank statements provide raw data but do not indicate whether the recorded figures are complete or accurate. Account verification reports typically confirm the existence of accounts but do not reconcile specific balances. Similarly, balance confirmation reports generally serve to verify the balance with an external party rather than reconciling accounts internally. Thus, reconciliation reports are clearly the most appropriate tool for validating bank and credit card balances.