When Preparing a Bank Reconciliation,outstanding Checks Should Be

question 20

Multiple Choice

When preparing a bank reconciliation,outstanding checks should be:

• A)added to the bank statement balance.
• B)subtracted from the bank statement balance.
• C)added to the checkbook balance.
• D)subtracted from the checkbook balance.
• E)ignored until they have cleared.

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Definitions:

Cash Basis

An accounting method in which revenues and expenses are recorded only when cash is received or paid, rather than when they are incurred.

Revenue Recognized

Income that a company has earned during a period but has not yet received payment for, adhering to the revenue recognition principle.

Money Received

The sum of cash or cash equivalents that an entity acquires from various sources, including sales or funding.

Revenue

The sum of money earned from the sale of products or services central to the business's main activities.