In preparing a bank reconciliation statement for a business with a substantial bank balance,the appropriate treatment for a cheque outstanding at end of month,$450,is to:
A) add it to the balance as per bank statement.
B) deduct it from the balance as per bank statement.
C) add it to the balance per company records.
D) deduct it from the balance per company records.

Question

Quizplus · Accepted Answer

Outstanding checks are checks that have been written and recorded in the company's cash account but have not yet cleared the bank. Therefore, they should be deducted from the balance as per the bank statement to reconcile the company's records with the bank's records.

In Preparing a Bank Reconciliation Statement for a Business with a Substantial