Future Business Leaders of America (FBLA) Accounting Practice Test

What are checks that have been written but not yet deposited called?

1. Outstanding deposits

2. Bank service charge

3. NSF checks

4. Stop payment order

The correct answer is: Outstanding deposits

The term for checks that have been written but not yet deposited is "outstanding deposits." This refers specifically to checks that a business or individual has issued and recorded in their accounting books, but have not yet cleared through the bank, meaning the funds have not yet been withdrawn from the account. Outstanding deposits represent amounts that are expected to decrease the bank balance once the checks are presented to the bank. They play a crucial role in managing cash flow and tracking available funds within a bank account. Understanding outstanding deposits is essential for accurate reconciliations between a business's records and its bank statements, ensuring that financial statements reflect true cash positions. Other options relate to different banking and accounting concepts. For instance, bank service charges are fees imposed by the bank for account maintenance or transactions, NSF checks refer to checks that cannot be processed due to insufficient funds, and a stop payment order is a request to a bank to cancel a check previously issued. Each of these terms serves a distinct purpose within the financial management and accounting framework.