BACHELOR OF BUSINESS ADMINISTRATION

Detailed explanation-1: -Answer and Explanation: It is true that when reconciling a bank account, the company does not have to prepare an adjusting entry for outstanding checks. The outstanding checks are included in the cash balance and the bank balance is adjusted to note that the checks are outstanding.

Detailed explanation-2: -However, the bank reconciling items, such as deposits in transit and outstanding checks, are not provided with adjusting entries because these only pertains to timing differences and may be settled once recorded by the bank. Therefore, outstanding checks do not require adjusting entries.

Detailed explanation-3: -The most common types of adjusting journal entries are accruals, deferrals, and estimates. It is used for accrual accounting purposes when one accounting period transitions to the next. Companies that use cash accounting do not need to make adjusting journal entries.

Detailed explanation-4: -What entry is required in the company’s accounts to record outstanding checks? No entry is required. In a bank reconciliation, checks issued that have not been paid by the bank are added to the balance according to the bank statement.

Detailed explanation-5: -Answer and Explanation: This is false. Journal entries are not required if the bank reconciliation includes outstanding checks.