Final answer:
The first step in bank reconciliation is adjusting the balance per bank to account for outstanding checks, deposits in transit, or bank errors before comparing it with the company's ledger.
Step-by-step explanation:
The first step in preparing a bank reconciliation is adjusting the balance per bank. This involves comparing the bank statement balance with the cash balance in the company's ledger, and noting any differences that might be due to outstanding checks, deposits in transit, or bank errors.
Once the balance per bank is adjusted for these items, the adjusted bank balance should ideally match the balance according to the company's records after they have been adjusted for any book errors, bank charges, or other transactions not yet recorded by the company. Only after these adjustments can the two balances be properly compared. Thus, the correct option for the first step in preparing a bank reconciliation would be Option D: adjusting the balance per bank.