If the balance on the bank statement does not equal the balance in the Cash account,then it can be assumed that
A)the company has no errors in its records concerning the Cash account.
B)the bank has made errors in preparing the statement.
C)the company has made errors in is records concerning the Cash account.
D)there will be items reconciling the difference.

Question

Quizplus · Accepted Answer

The difference between the balance on the bank statement and the balance in the Cash account is called the reconciling difference. This difference can be caused by items such as outstanding checks or deposits in transit, which need to be reconciled in order to bring the two balances in line with each other. Therefore, it can be assumed that there will be items reconciling the difference. Option A and C are not correct as they assume that there were no errors made by either the company or the bank. Option B is also not correct because it assumes that the bank made errors in preparing the statement, without considering the possibility of errors made by the company.

If the Balance on the Bank Statement Does Not Equal