110 FARM ACCOUNTING 



ference is usually caused only by the fact that some of the 

 checks issued have not been presented at the bank. The 

 amount of a check is deducted from the check stub bal- 

 ance as soon as issued. It is deducted from the balance 

 on the bank's books only when the check reaches the bank, 

 often several days later. As a result it is quite common 

 on any given date to find a difference between the amount 

 the bank shows as being on deposit, and the amount the 

 check stubs show. The amount that should be used in 

 verifying the Cash account is the check stub balance, since 

 it shows how much more one may draw out of the bank. 

 The bank's figure is usually larger than the check stub 

 balance but it is subject to a deduction at any time when 

 some outstanding check is pres.-nted. 



ILLUSTRATION 24 

 BANK RECONCILIATION STATEMENT 



Balance per bank pass book, June 30, 1916 $1,415 



Less checks outstanding, 



No. 201 (for example) payable to Jas. Brown 



issued June 30, 1916 35 



Balance per check stubs, June 30, 1916 $1,380 



Illustration 24 shows a check outstanding for >:i."> issued 

 on June 30, 1916, to Jas. Brown, meaning that the latter 

 has not presented it at the bank for payment. Hy r 

 ring to Illustration 18, 20 or 22 it is seen that Mr. Brown 

 was paid $35 for labor. Such payment is recorded on the 

 check stubs and in the cash book or cash journal at the 

 time of issue. Hence the check stub balance is decreased 

 by that amount. In this case it leaves the eheck stub bal- 

 ance $1380, which is the amount used in the calculation 

 011 page 108 in verifying the balance of the Cash account. 



Errors on Check Stubs. It happens occasionally that 



