Question

a public accountant obtains a january 10 cut-off bank statement for a client directly from the bank. very few of the outstanding cheques listed on the client's december 31 bank reconciliation cleared during the cutoff period. a probable cause for this is that the client:_____.

Answer 1

A probable cause for few outstanding cheques clearing could be cheques issued near month's end, a delay in the bank's processing, or slow postal service delivery.

Step-by-step explanation:

If a public accountant obtains a January 10 cut-off bank statement for a client directly from the bank and observes that very few of the outstanding cheques listed on the client's December 31 bank reconciliation cleared during the cut-off period, a probable cause for this could be that the client has issued cheques near the end of the month or year, and the recipients have not yet presented these cheques to their banks for payment. Another possible explanation is that the client's bank has a delay in processing cheques, which can sometimes take several days, especially around holiday periods when banking activity can be slower than usual. Lastly, the issue could be with the postal service if the cheques were mailed out and have not yet been delivered to their intended recipients.