Accounting · Bank Reconciliation Statement
A multinational corporation operates a centralized treasury model where all regional bank balances are swept into a main account at the end of each business day. The accountant notices that the regional bank statements show 'sweep-out' entries that do not correspond immediately to the main account's 'sweep-in' entries due to clearing delays. The Cash Book reflects the sweep at initiation, while the bank reflects it upon final settlement. Which of the following best describes how to treat these intra-company transfers in transit when preparing the BRS for a regional branch?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Treat regional sweep-outs as unpresented cheques and sweep-ins as uncleared deposits.✓
- 2Adjust the Cash Book balance daily to ignore these timing differences.
- 3Record the sweep-out as a bank error until the main account confirms receipt.
- 4Classify all in-transit sweeps as miscellaneous bank charges for the interim.
Correct answer
Treat regional sweep-outs as unpresented cheques and sweep-ins as uncleared deposits.
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