Sparrow Corporation
The items listed below were identified while preparing a bank reconciliation for the checking account of Sparrow Corporation as of March 31, 2012.

- Refer to the information presented for Sparrow Corporation. How will the outstanding checks be handled within a bank reconciliation?
A) Add to the balance in the company's records
B) Subtract from the balance in the company's records
C) Add to the bank statement balance
D) Subtract from the bank statement balance

Question

Sparrow Corporation 
The items listed below were identified while preparing a bank reconciliation for the checking account of Sparrow Corporation as of March 31, 2012.

- Refer to the information presented for Sparrow Corporation. How will the outstanding checks be handled within a bank reconciliation?
A) Add to the balance in the company's records 
B) Subtract from the balance in the company's records 
C) Add to the bank statement balance 
D) Subtract from the bank statement balance

Quizplus · Accepted Answer

Outstanding checks are checks that have been written and recorded in the company's books but have not yet cleared the bank. Therefore, they need to be subtracted from the bank statement balance during a bank reconciliation.

Sparrow Corporation The Items Listed Below Were Identified While Preparing a Bank