Which one of the statements below is true? Deposits in transit are deducted from the balance per the bank statement, and outstanding checks are added to the balance per the bank statement during the bank reconciliation process. Both deposits in transit and outstanding checks are added to the balance per the bank statement during the bank reconciliation process. Both deposits in transit and outstanding checks are deducted from the balance per the bank statement during the bank reconciliation process. The deposits in transit are added to the balance per the bank statement, and outstanding checks are deducted from the balance per the bank statement during the bank reconciliation process.

Question

Fleming

Business

11 April, 22:39

Which one of the statements below is true? Deposits in transit are deducted from the balance per the bank statement, and outstanding checks are added to the balance per the bank statement during the bank reconciliation process. Both deposits in transit and outstanding checks are added to the balance per the bank statement during the bank reconciliation process. Both deposits in transit and outstanding checks are deducted from the balance per the bank statement during the bank reconciliation process. The deposits in transit are added to the balance per the bank statement, and outstanding checks are deducted from the balance per the bank statement during the bank reconciliation process.

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Answers (1)

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Holly Turner · Answer 1

The correct answer is letter "D": The deposits in transit are added to the balance per the bank statement, and outstanding checks are deducted from the balance per the bank statement during the bank reconciliation process.

Explanation:

The bank reconciliation process refers to the match between the bank account in the company's books and the real balance the company has in its bank accounts. Both amounts must be the same, otherwise, there is a mistake whether from the bank of the company.

Deposits in transit are those the firm has already accepted the charge for but have not been transferred to the corresponding party. They tend to be included in the bank statement balance. Outstanding checks refer to those the firm has not paid for, therefore, if there is any balance in the bank statement, the amount of the funds will directly be deducted.