How would outstanding checks be handled when reconciling the ending cash balance per the bank statement to the correct adjusted cash balance?
A)They would be added to the balance of the bank statement.
B)They would be subtracted from the balance of the bank statement.
C)They would be added to the balance per books.
D)They would be ignored.

Question

Quizplus · Accepted Answer

Outstanding checks are checks that have been issued but have not yet cleared the bank. Therefore, they have not been recorded on the bank statement but have been recorded in the company's books. To reconcile the ending cash balance per the bank statement to the correct adjusted cash balance, outstanding checks need to be subtracted from the balance of the bank statement. This will give the correct adjusted cash balance.

How Would Outstanding Checks Be Handled When Reconciling the Ending