Multiple Choice
A bank reconciliation should be prepared periodically because:
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6. Internal Controls and Reporting Cash
Bank Reconciliation
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Join thousands of students who trust us to help them ace their exams!Watch the first videoMultiple Choice
Outstanding checks refer to checks that have been:
A
received from customers but not yet deposited
B
written and recorded by the company but not yet cleared by the bank
C
deposited by the company but not yet recorded by the bank
D
written and cleared by the bank but not yet recorded by the company
Verified step by step guidance1
Understand the concept of outstanding checks: Outstanding checks are checks that have been issued by a company and recorded in its accounting records but have not yet been cleared or processed by the bank.
Analyze the options provided in the problem: Carefully read each option and determine which one aligns with the definition of outstanding checks.
Eliminate incorrect options: For example, checks received from customers but not yet deposited do not fit the definition of outstanding checks, as these are not issued by the company.
Focus on the correct option: Outstanding checks are specifically those written and recorded by the company but not yet cleared by the bank. This matches the definition provided earlier.
Confirm understanding: Ensure that the selected option aligns with the concept of outstanding checks and the company's accounting process, where the checks are recorded in the books but are pending bank clearance.
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