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 cash balance in the bank statement and the cash balance in the company's records are typically due to timing differences in recording transactions. For example, checks that were issued but not yet cashed or deposits that were made but not yet reflected in the bank statement. These timing differences affect the reconciling items on the bank reconciliation. While errors in the accounting process or errors made by the bank may contribute to the differences, they are not the primary reason for the discrepancies. Similarly, the differences between cash basis and accrual basis accounting would not affect the reconciling items on the bank reconciliation.

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