When preparing a bank reconciliation statement, outstanding checks would:
A) increase the cash balance according to the bank statement.
B) deduct the cash balance according to the bank statement.
C) increase the cash balance according to the company statement.
D) deduct the cash balance according to the company statement.

Question

Quizplus · Accepted Answer

Outstanding checks represent payments made by the company that have not yet cleared the bank. Therefore, the cash balance according to the company statement would be higher than the cash balance according to the bank statement, resulting in a deduction of the cash balance on the bank reconciliation statement.

When Preparing a Bank Reconciliation Statement, Outstanding Checks Would