Timing differences Updated November 2026

Outstanding checks

An outstanding check is one the company has written and deducted in its books but the payee has not yet cashed, so it is not on the bank statement. Subtract outstanding checks from the bank statement balance; they need no journal entry and stay on the list until they clear.

Syntax

Outstanding checks = Checks recorded in books (this month + prior outstanding) - Checks cleared on this statement

Part	What it is
`Side`	Bank side, subtract
`Journal entry`	None
`List`	Check number, date, payee, amount; remove each when it clears

Examples

Checks written in April: #401 250, #402 1,000, #403 75
Cleared on April statement: #401, #403

Result: Outstanding: #402 for 1,000. Adjusted bank balance = statement balance - 1,000.

Statement balance 5,900; outstanding checks #402 1,000 and #398 (from March) 300
Book balance 4,600

Result: 5,900 - 1,300 = 4,600, equal to the books.

Two checks to the same payee: #410 for 120 and #415 for 120; only one 120 cleared

Result: Match by check number, not amount: the statement shows #415, so #410 is the outstanding one.

Common mistakes

Voiding an outstanding check just because it is old: it may still be presented; follow the stale check procedure instead.
Dropping last month's outstanding checks from the list: they stay until they clear.
Subtracting outstanding checks from the book balance: the books already deducted them.

Practice Outstanding checks

These drills check your answer on live data, free, no account needed.

Checks still in the mailClassify every line on the bank statement and in the cash book, then enter the adjusted bank and book balances.
Same payee, different checksClassify every line on the bank statement and in the cash book, then enter the adjusted bank and book balances.
A check that never clearsLast month's outstanding items are listed separately. Classify them too, then every line, and enter both adjusted balances.

Questions

How long can a check stay outstanding?

Many banks stop honoring checks after six months, but the liability remains. Follow up with the payee and treat it as stale after your policy period.

Are outstanding checks a liability?

No separate liability is recorded. The expense or payable was settled when the check was recorded; the cash is simply still in the bank account.

Deposits in transitA deposit in transit is cash recorded in the books that the bank has not yet credited. Add it to the bank statement balance and make no journal entry.
Prior month outstanding checksHow last month's outstanding checks and deposits in transit roll into this month's bank reconciliation: remove those that cleared, keep those that did not.
Stale checksA stale check has been outstanding past the bank's honoring period, often six months. How to confirm it, void it, restore cash and the liability, escheat.
Adjusted bank balanceAdjusted bank balance = statement balance + deposits in transit - outstanding checks, plus or minus bank errors. Worked examples with exact results.