 Hello in this lecture we will define outstanding checks. According to fundamental accounting principles while 22nd edition the definition of outstanding checks is, checks written and recorded by the depositor but not yet paid by the bank at the bank statement date. So when we're thinking about the outstanding checks we're basically thinking about those checks that we have written therefore on our books we have them decreasing the amount of our checking account balance. However, they have not yet cleared the bank we can see that would be the case given the fact that the check has to first go to the recipient of the check they have to then take that and put it into their bank their bank needs to contact our bank before the transaction can take place on the bank side of things therefore outstanding checks is usually going to be one of those reconciling items on the bank reconciliation. So if we take a look at the bank statement and compare the bank statement to our books the bank statement might look something like this it'll have a beginning balance it'll have the sum of the additions and the subtractions for our account and the ending balance it'll provide the deposits it'll provide a breakout of the checks we have written as well as some other types of transactions that might be in the bank reconciliation. When we compare the bank reconciliation books to our books that's really what we're talking about when we're looking at these timing differences one of these time differences being the outstanding checks we expect the balance in the bank here to be different than our cash account balance because of these timing differences when we go through these accounts we'll just going to check everything off and look for the things that do not match if they're on the bank statement but not on our books then we're going to have to fix our books we're going to have to do some journal entries and actually record our cash account to match the checking account because those transactions will have to be included then we're going to look for the other amounts that are on our books but not on the bank statement those will include the outstanding checks so when we do our actual bank reconciliation we're going to say hey here's the bank balance here's the bank balance here's the bank balance how what's the difference between their balance and our balance it's going to be the outstanding checks and the outstanding deposits that's how we're going to get to our ending balance here that's how we know that we reconcile so we're always going to see that the bank balance is almost always going to be different than our balance part of the reason of that is the timing difference related to the outstanding checks