Which of the following are typical reconciling items in a bank reconciliation?

• A. Accounts payable and accrued wages
• B. Deposits in transit and outstanding checks
• C. Prepaid expenses and accrued taxes
• D. Interest revenue and depreciation

Answer: (B)

In a bank reconciliation, you look for differences between the cash balance shown on the bank statement and the cash balance in the company’s books that come from timing gaps or bank actions. Deposits in transit and outstanding checks are classic timing items: a deposit in transit is money the company has recorded as received but the bank hasn’t yet credited, while an outstanding check is payment the company has recorded as issued but the bank hasn’t yet processed. These create differences between the two balances that you adjust for during the reconciliation.

The other options involve internal accruals (like accounts payable or accrued wages) or non-cash accounting items (like depreciation), which don’t reflect timing discrepancies between the bank and the company’s cash accounts, so they aren’t typical reconciling items.