Answer :
Final answer:
Deposits in transit are always added to the bank balance during reconciliation, ensuring alignment between company records and actual funds available.
Explanation:
Deposits in transit would always be added to the bank balance during a reconciliation process. Deposits in transit refer to the funds that a company has received and recorded in their accounting records but have not yet been reflected on the bank statement due to the timing differences in processing.
For example, if a company deposits a check right before the end of the month, but the bank statement only shows it a few days into the new month, that amount is considered a deposit in transit. Adding this amount to the bank balance during reconciliation ensures that the company's records align with the actual funds available.
On the other hand, outstanding checks, returned checks, and bank errors may not always lead to an addition to the bank balance during reconciliation as they can sometimes result in deductions or corrections to the balance.
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