What happens when tax rate and account code details are imported in a bank statement CSV file?

When tax rate and account code details are imported in a bank statement CSV file, Xero automatically reconciles statement lines as transactions. This process allows Xero to match the imported lines with existing transactions in the accounting records based on the details provided.

The automatic reconciliation feature is particularly useful as it streamlines the bookkeeping process, allowing for quicker and more efficient updates to the financial records. By including tax rates and account codes in the import, Xero can accurately allocate the transactions to the appropriate accounts and apply the correct tax treatment, ensuring compliance and precise financial reporting.

In contrast, the other options do not accurately reflect the functionality of Xero in this context. For instance, prompting for manual reconciliation or preventing coding of existing transactions would require user intervention and could slow down the accounting process, which is not the purpose of importing bank statement lines. Additionally, the deletion of duplicate transactions is not a direct function of importing; instead, Xero seeks to create or update records based on the imported data rather than removing entries unless specific criteria are met.