A check outstanding will cause the bank's cash balance to be higher than the company's cash balance.

Question

Quizplus · Accepted Answer

If a check is outstanding, it means that the company has written a check that has not yet been cashed or deposited by the recipient. This check would still be reflected in the company's cash balance but would not be reflected in the bank's cash balance until it has been presented for payment. Therefore, the bank's cash balance would be higher than the company's cash balance until the outstanding check is cleared.

A Check Outstanding Will Cause the Bank's Cash Balance to Be