The balance of cash is likely to differ from the bank statement balance. What are the factors likely to be responsible for the difference?
There are several factors that can contribute to a difference between the balance of cash in the accounting records and the bank statement balance. Some common reasons for this discrepancy include:
1. Outstanding checks: If a company has issued checks that have not yet been presented to the bank for payment, the cash balance in the accounting records will be higher than the bank statement balance.
2. Deposits in transit: Deposits made by a company near the end of a bank statement period may not...