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Reconciliation is the process of matching the transactions you have entered into KMyMoney with the transactions listed for that account by the institution. This is most commonly done with the list of transactions in a statement, be it a bank statement, credit card statement, loan statement, or any other statement. It can also be done against an on-line listing of the account, although this is less common. If any discrepancies are found, then either you or the person who created the statement have made a mistake.
To reconcile an account, choose your account from the drop down box and click on the reconcile icon, select the → menu item or use the Ctrl+Shift+R shortcut.