During a bank reconciliation process,
A) outstanding checks and deposits in transit are added to the bank statement balance
B) outstanding checks are subtracted and deposits in transit are added to the bank statement balance
C) outstanding checks and deposits in transit are subtracted from the bank statement balance
D) outstanding checks are added and deposits in transit are subtracted from the bank statement balance

Question

Quizplus · Accepted Answer

Outstanding checks refer to checks that have been issued by the company but have not yet cleared the bank. Therefore, they need to be subtracted from the bank statement balance to obtain the correct balance. Deposits in transit refer to deposits that have been made by the company but have not yet been recorded by the bank. Therefore, they need to be added to the bank statement balance to obtain the correct balance.

During a Bank Reconciliation Process