The following checks were outstanding when you did last month’s bank reconciliat

Question

The following checks were outstanding when you did last month’s bank reconciliation and remain outstanding this month:
           Check number          Amount
                    3452                           $1,000
                    3454                             1,500
                    3455                             2,000
What adjustment should you make this month?

Increase the bank balance by $4,500

No adjustment needed because they were outstanding last month

Reduce the book balance by $4,500

Increase the book balance by $4,500

Reduce the bank balance by $4,500

Increase the bank balance by $4,500

No adjustment needed because they were outstanding last month

Reduce the book balance by $4,500

Increase the book balance by $4,500

Reduce the bank balance by $4,500

Explanation / Answer

Answer is Reduce the bank balance by $4500 Checks outstanding of previous months will either clear in current month or will remain outstanding. In bank reconciliation that outstanding check will be deducted from balance appearing on bank statement.

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