How would outstanding cheques 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 ignored.

Question

Quizplus · Accepted Answer

Outstanding cheques represent payments made by the company that have not yet cleared the bank. Therefore, they have already been subtracted from the company's cash balance per books. To reconcile the bank statement, outstanding cheques need to be subtracted from the balance per the bank statement in order to arrive at the correct adjusted cash balance.

How Would Outstanding Cheques Be Handled When Reconciling the Ending