Outstanding checks Outstanding htc arches steady recoded by the depositor a cash disbursements but not yet reflected on the batt pepe t not yet reflected on the bank Outstanding checks include; a. Checks drawn and already given to payees but not yet presented for Payment, . Certified checks — 4 coptfed chock is one whoro the’ bat has siamped on its face the word “aecepted” ot “corti Indiontingwulicency of fund ‘When the bank certifies a check, the tof the de ifles a check, the account of the depositor is immediately debited or charged to insure the eventual payment of the check, Certified checks should be deducted from the total outstanding checks (if included thervin) becauso they are no longer outstanding for bank reconciliation purposes, Forms of bank reconciliation av Adjusted balance method ~ Under this method, the book balance and the hank balance are brought tow cornet cash balance that mise appear an the balance sect. 1». Book to bank method — Under this method, the book balance ‘is reconciled with the bank balance or the book halanee is adjusted to equal the bank balance © Bank fo book method — Under this mothod, the bank balance 4s reconciled with the book balance or the bank adjusted to equal eho hook balance, ‘The first method js preferred over the other two. Proforma reconcil ‘Adjusted balance method stb book Beoctalante xr ‘Add: Credit memes 3x ‘etal xx es Debit memos xs Adjusted book blanee 2s Bankeblanoy O°" ae {Md Deposits in transit as ‘Total xx ‘Les: Outstanding chocks ax Adjusted benk balanoe xx ‘The reeoneiling items of the book are simply termed as credit memos and debit memos, No details are shown to simplify the illustration, Th actual frm reconeilintion, details will have to be shown. Moreover, errors are excluded because no definite rule ean be made whether these aro to be added or deducted, “xvors will have to be analyzed for proper treatment. However, exvors are reconciling items of the party which committed them. 1 will be observed that under the adjusted balance method, the credit’ memos aro alway’ added to the book balance and the debit: memos are always deducted from tho book balance. Deposit in transit arv always added tothe bank balance and the ‘outstanding cheeks are always deducted from the bank balance.