Differences between the amount of cash reported on a company's bank statement and the balance in the company's Cash account before the bank reconciliation are primarily due to:
A)errors in the accounting process by the company.
B)errors made by the bank.
C)differences between the cash basis and accrual basis of accounting.
D)the timing difference in recording transactions.

Question

Quizplus · Accepted Answer

The differences between the amount of cash reported on a company's bank statement and the balance in the company's Cash account before the bank reconciliation are primarily due to timing differences in recording transactions. This can include checks that haven't cleared the bank yet, deposits in transit, or bank fees that haven't been recorded yet. These differences can be reconciled through the bank reconciliation process, which identifies and resolves any discrepancies. While errors in the accounting process by the company or errors made by the bank can also contribute to these differences, they are typically not the primary cause. Differences between the cash basis and accrual basis of accounting would typically be addressed through adjusting entries rather than through the bank reconciliation process.

Differences Between the Amount of Cash Reported on a Company's