BUSINESS ADMINISTRATION
FINANCIAL ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Issued by the bank
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Written and not yetrecorded in the company books
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Written, recorded on thecompany books, sent to the payee, but not yet paid by the bank
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Written with insufficient funds
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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.
Detailed explanation-2: -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-3: -Outstanding checks are checks written by the company, recorded in the company accounts, but not yet appearing on the bank account as paid.
Detailed explanation-4: -Definition of Outstanding Check An outstanding check is a check that a company has issued and recorded in its general ledger accounts, but the check has not yet cleared the bank account on which it is drawn. This means that the bank balance will be greater than the company’s true amount of cash.