<b>Capitalization to Assets:</b>
In accounting there is a matching concept, i.e your cost must match/ contribute to revenues.
The expenses resulted in revenues in the same year are revenue expenses e.g. Wages, Purchase expenses etc., The expenses that are not resulted into immediate revenues are called capital expenses. eg. Expenses on purchase of machinery, buildings etc,.
These capitalized expenses sit in balance sheet. Revenue expenses goes to P&L account.
<b>Reconciliation:</b> Means comparing the balaces with other and arriving at the differences. Eg. Bank Reconciliation, Finance and Costing proft reconciliation.
Other concept in SAP is to have the mother account for all sub ledger accouts like Sundry Creditors and Sundry Debitors. This concept automatically reconciles the Subledger balances to the main ledger.
This can be used in variety of ways depending on the need.
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