The auditors test the client's monthly bank reconciliation to verify whether the client's recorded bank balance is the same amount as the actual cash in the bank.Which of the following would not explain a difference between the company's cash balance and the bank's balance for the client?
A)Deposits in transit
B)Checks are written by the client in the same month the checks clear the bank.
C)Other reconciling items
D)Outstanding checks

Question

Quizplus · Accepted Answer

If checks are written by the client in the same month the checks clear the bank, then there would not be any timing differences between the cash balance recorded by the client and the bank balance. Therefore, this would not explain a difference between the two balances. The other options (A, C, and D) are all potential reconciling items that could cause a difference between the two balances.

The Auditors Test the Client's Monthly Bank Reconciliation to Verify