The Statement of Cash Flows Will Not Report the Outstanding Checks / Cheques - Cash Basis of Accounting

As the main Purpose of the Statement of Cash Flows is to show the cash position of a business at the end of accounting period, so it excludes or includes all the non cash itmes e.g., Depreciation, Bad Debts, etc., from Net Profit / Net Income / Net Loss for the year. Outstanding cheques are those which are presented for payment by the depositor but still are not reported or cleared by the bank at the end of period, so it is a deduction from cash balance as per bank while preparing Bank Reconciliation Statement. It is already deducted it from the individual or company’s balance as Per Cash Book.

Outstanding check is a type of Current Liability which is payable by the bank to payee named on the check.