Concept:Outstanding cheques are cheques issued by the business but not yet presented to the bank for payment.
Explanation:When a cheque is issued, it is recorded in the cash book immediately as a reduction.
The bank statement does not show this reduction until the cheque is presented and paid.
So the balance as per the bank statement is usually higher than the balance as per the cash book.
To reconcile the two balances, the total of such cheques must be deducted from the balance as per the bank statement.
This brings the bank statement balance down to agree with the cash book balance.
These cheques are not ignored in bank reconciliation.
Answer:B. deducted from the balance as per bank statement.