A cheque that was outstanding on last month's bank reconciliation was not among the cancelled cheques returned by the bank this month. As a result, in preparing this month's reconciliation, the amount of this cheque should be
A) Added to the book balance of cash
B) Deducted from the book balance of cash
C) Added to the bank balance of cash
D) Deducted from the bank balance of cash
E) Noted as a memo

Question

Quizplus · Accepted Answer

The cheque is still outstanding, meaning it has not yet been cleared by the bank. Therefore, it should be deducted from the bank balance of cash in the reconciliation.

A Cheque That Was Outstanding on Last Month's Bank Reconciliation