When you identify outstanding cheques in performing a bank reconciliation,you must:
A)deduct the amount of the outstanding cheques from the balance per books.
B)deduct the amount of the outstanding cheques from the balance per bank.
C)add the amount of the outstanding cheques to the balance per books.
D)add the amount of the outstanding cheques to the balance per bank.

Question

Quizplus · Accepted Answer

Outstanding cheques are those cheques that have been issued by the company but have not yet been cleared by the bank. Therefore, the balance per bank has not yet been reduced by the amount of outstanding cheques. To reconcile the balance, we need to deduct the amount of outstanding cheques from the balance per bank. Deducting the outstanding cheques from the balance per books is incorrect as this will result in an incorrect balance. Similarly, adding the outstanding cheques to either the balance per books or balance per bank is incorrect, as this will also result in an incorrect balance.

When You Identify Outstanding Cheques in Performing a Bank Reconciliation,you