BACHELOR OF BUSINESS ADMINISTRATION

Detailed explanation-1: -The definition of an outstanding check is a check that has been written, but it hasn’t been cashed-deposited by the bank, or otherwise cleared the bank. An outstanding check can be a personal or a business check.

Detailed explanation-2: -Deposits in transit are deposits that were made after the bank statement was issued, but have been recorded on the books. Outstanding checks are checks that have been written and recorded on the books, but have not yet been cashed or have not cleared the bank.

Detailed explanation-3: -Outstanding checks. These checks are called outstanding checks and cause the bank statement balance to overstate the company’s actual cash balance. Since outstanding checks have already been recorded in the company’s books as cash disbursements, they must be subtracted from the bank statement balance.

Detailed explanation-4: -The payee may cash the check immediately or might hold onto it for months. Checks that remain uncashed for long periods of time are called stale checks. Eventually, these checks will become void. This period can range from 60 days to six months.

Detailed explanation-5: -Example of Outstanding Checks The entry will debit Cash in order to increase the account balance. The credit portion of the entry will likely be to the account that was originally debited when the check was issued.