 Hello in this lecture we will define cancelled checks. According to fundamental accounting principles while 22nd edition the definition of cancelled checks is checks that the bank has paid and deducted from the depositors account. We're basically looking at those checks that are our accounts. If we're talking about their our accounts our bank accounts the checks that we have written that have finally cleared the bank and therefore their cancelled checks and have then been cleared on the bank's side of the transaction. Therefore if we were to take a look at a bank statement the bank statement being from the bank being separate from of course our books that we would then be creating on our side we would see and the checks that have been cleared would be basically the cancelled checks the cancelled checks that have been deducted from our accounts the ones that we wrote that we have to of course wait for them to clear the bank the bank the checks that have not yet been cleared are going to be those outstanding checks when we compare the bank statement from the bank to our books such as this the general ledger we're really looking for those checks that are outstanding the ones that aren't cancelled the ones that have not cleared that's usually going to be the difference that we will then reconcile in the bank reconciliation