A check that was outstanding in a previous month's bank reconciliation was again not included in the canceled checks returned by the bank. When reconciling the statement this month, the amount of the check should be:

Question

Quizplus · Accepted Answer

When reconciling a bank statement, outstanding checks (checks written by the company that have not yet been processed by the bank) are deducted from the bank statement balance to reconcile it with the company's book balance. This is because the bank has not yet recognized the check payment, so the bank's balance is higher than the company's records show.

A Check That Was Outstanding in a Previous Month's Bank