Question

Give three reasons why the business records will differ from the banks records of the back account.

A) Outstanding checks, deposits in transit, bank errors.
B) Bank fees, ATM withdrawals, interest income.
C) Customer payments, supplier invoices, account transfers.
D) Employee salaries, petty cash expenses, loan disbursements.

Answer 1

The business records may differ from the bank's records of a bank account due to outstanding checks, deposits in transit, and bank errors.

Step-by-step explanation:

There are three reasons why the business records may differ from the bank's records of the bank account:

1. Outstanding checks: These are checks that have been issued by the business but have not yet been presented for payment to the bank. Therefore, they will be recorded in the business records but not in the bank's records.
2. Deposits in transit: These are deposits made by the business that have not yet been received and processed by the bank. As a result, they will be reflected in the business records but not in the bank's records until they are processed.
3. Bank errors: Occasionally, the bank may make errors in recording transactions, which can lead to discrepancies between the business's records and the bank's records.