Bank Reconciliations

Question 1

What is a deposit in transit?

Answer 1

Cash in books but not in bank statement

Question 2

What is an outstanding check?

Answer 2

Checks that have been deducted from the books but not the bank.

Reason: there is a delay between when check gets recorded on books and when the bank records the check.

Question 3

What is a non-sufficient fund check?

Answer 3

A customer payment by check that has been recorded as a deposit on the books but was not recorded by the bank because of insufficient funds of the customer.

Overstates book balance

Subtract from book