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why differences exist between the Bank Balance and the Book Balance of the checking account.

why differences exist between the Bank Balance and the Book Balance of the checking account.

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Answer #1

Answer:- Below are the common reasons for differences:-

1) Outstanding checks:- Checks which are written in Accoutning books, but not presented for payment by the other party.

2) Bank Charges :- Bank charges by bank not recorded in Accounting Books.

3) Deposit in transit :- Deposit received in Accounting Books, but it is iyet to be processed by bank.

4) Electroninc Deposits:- Electronic Deposits in Bank but not recorded in Accounting Books.

5) Errors:- Errors made by Bank or Accountant.

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