Question

The proper treatment of outstanding cheques on a bank reconciliation is to show them as an __________.

• A. addition to the book balance of cash
• B. deduction to the book balance of cash
• C. addition to the bank statement balance
• D. deduction to the bank statement balance

Answer 1

Answer: (C)

addition to the bank statement balance

In case of outstanding cheques the entry for the same would have been entered in the cash book and so the bank statement would be lower than the cash book balance.

So, while preparing a bank reconciliation statement the proper treatment of outstanding cheques is to show them as an addition to the bank statement balance.