Question

Give three reasons why the bank's records of the bank account will differ from the business records of the bank account.

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

Answer 1

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

Step-by-step explanation:

There are several reasons why the bank's records of a bank account may differ from the business records of the same bank account. Here are three possible reasons:

1. B) Outstanding checks: If a business has written checks that have not yet been cashed by the recipients, these checks would be considered outstanding and would not yet be recorded in the bank's records.
2. D) Employee salaries: The bank's records may not include employee salaries as they are typically paid directly by the business using funds from the bank account.
3. B) Bank errors: Banks are not infallible and may occasionally make mistakes in recording transactions. These errors would cause discrepancies between the bank's records and the business records of the bank account.