If a Check Written by a Firm Is Not Canceled

question 32

Multiple Choice

If a check written by a firm is not canceled by the bank and returned with the month's bank statement,the firm should

• A) consider this check as outstanding when preparing the bank reconciliation.
• B) immediately notify the bank requesting that it correct its records.
• C) adjust the balance in the firm's checkbook to reflect the data that appears in the bank's records.
• D) make no adjustment when preparing the bank reconciliation.

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Definitions:

Book Balance

The balance of an account according to the accounting records, not necessarily reflecting available funds or amounts for spending.

Bank Reconciliation

The process of matching and comparing figures from the accounting records against those shown on a bank statement to identify any discrepancies.

Depositor's Records

Documentation maintained by an individual or entity that tracks deposits made in a bank account.

Bank Statement

A monthly or periodic summary provided by a bank detailing all transactions in an account, including deposits, withdrawals, fees, and interest earned.