During the testing of a year-end bank reconciliation,an auditor noticed that the majority of checks listed as outstanding at year-end did not clear the bank until the middle of the subsequent month.Which of the following is a likely explanation?

Question

Quizplus · Accepted Answer

Checks were issued before year-end but not mailed until the subsequent period. This delay in mailing caused the checks to clear the bank in the middle of the subsequent month, instead of before year-end. This is a common issue that can arise in bank reconciliations.

During the Testing of a Year-End Bank Reconciliation,an Auditor Noticed