Question

Outstanding cheques as a reconciling item are recorded on which side of Bank Reconciliation Statement?

Answer 1

An Outstanding cheque is a cheque which has not been cleared the bank. Outstanding cheques are usually deducted from the bank balance in the bank reconciliation statement such that when computing the final balance of a bank the total amount of outstanding cheques are subtracted from the ending balance of the bank. In the case of bank while reconciling the balances as per cash book and pass book, the outstanding cheques are added to book adjusted balance of cash. The bank will credit the bank account only when the cheques are cleared.