Which of the following would be added to your cash balance based on the information on your bank statement?Multiple choice question.Interest depositedDeposits in transitOutstanding checks
Question
Which of the following would be added to your cash balance based on the information on your bank statement?Multiple choice question.Interest depositedDeposits in transitOutstanding checks
Solution
The answer is "Interest deposited". Here's why:
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Interest deposited: This is the amount of money the bank has added to your account as a reward for keeping your money with them. This increases your cash balance.
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Deposits in transit: These are deposits that have been made but not yet processed or posted by the bank. While they will eventually increase your cash balance, they are not reflected in your current balance on the bank statement.
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Outstanding checks: These are checks that have been written and given out, but not yet cashed or deposited by the recipient. These will decrease your cash balance once they are cashed, so they do not increase your cash balance.
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