If a bank reconciliation included $600 of outstanding cheques, the journal entry to record this reconciling item would include:

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. They are a reconciling item in the bank reconciliation process to match the company's cash records with the bank statement. No journal entry is required for outstanding checks because they have already been recorded in the company's books when the checks were issued. The purpose of the bank reconciliation is to identify differences between the company's records and the bank's records and to make adjustments for items that have not yet been recorded by the bank.

If a Bank Reconciliation Included $600 of Outstanding Cheques, the Journal