Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

6. Internal Controls and Reporting Cash

Bank Reconciliation

Financial Accounting

6. Internal Controls and Reporting Cash

Bank Reconciliation

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Multiple Choice

Which of the following best describes an outstanding check in the context of bank reconciliation?

A check that has been issued by the company but has not yet cleared the bank.

A check that has been deposited and recorded by the bank but not yet recorded by the company.

A check that has been canceled by the bank due to insufficient funds.

A check that has been recorded in both the company's books and the bank statement.

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Verified step by step guidance

Understand the concept of bank reconciliation: Bank reconciliation is the process of comparing the company's accounting records with the bank statement to identify discrepancies and ensure accuracy.

Define an outstanding check: An outstanding check is a check that has been issued by the company and recorded in its books but has not yet cleared the bank, meaning the bank has not yet processed the payment.

Eliminate incorrect options: Review each option provided in the problem and eliminate those that do not match the definition of an outstanding check. For example, a check deposited and recorded by the bank but not yet recorded by the company does not fit the definition.

Focus on the correct option: Identify the option that matches the definition of an outstanding check, which is 'A check that has been issued by the company but has not yet cleared the bank.'

Relate the concept to bank reconciliation: Recognize that outstanding checks are subtracted from the bank balance during the reconciliation process because they represent payments that have not yet been processed by the bank.