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 subtracted from the balance per books.

Question

Quizplus · Accepted Answer

Outstanding checks are checks that have been written and recorded in the company's cash ledger but have not yet been cashed by the recipient and cleared by the bank. When reconciling the bank statement, these checks need to be subtracted from the balance per the bank statement to reflect the actual available cash balance, as the bank statement will not yet show these amounts deducted.

How Would Outstanding Checks Be Handled When Reconciling the Ending