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18 December, 23:16

Checks written in late December do not appear on a December 31 Bank Statement because they were not cleared by the bank as of March 31. How would you treat this difference while reconciling the bank balance? A. Add them to the bank balance. B. Subtract them from the bank balance. C. Add them to the company's cash balance. D. Subtract them from the company's cash balance.

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  1. 18 December, 23:20
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    B) Subtract them from the bank balance.

    Explanation:

    When you are adjusting your bank statement you must subtract any outstanding checks and add any deposits in transit.

    In this case, the checks that were written at the end of December will probably be cashed during the next months, but the company must adjust their bank balance because they know that the checks will eventually be cashed, sooner or later.
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