When confirming accounts payable during a bank reconciliation, which of the following procedures is most appropriate?

• A. Verify the bank's ending balance with the company's general ledger cash account.
• B. Compare the accounts payable ledger to vendor statements and confirm balances directly with vendors.
• C. Match the cash receipts journal to the bank statement deposits.
• D. Recalculate the outstanding checks listed on the bank reconciliation.

Answer: (B)

Verified step by step guidance

1. Understand the context of the problem: The question is about confirming accounts payable during a bank reconciliation. Accounts payable refers to amounts owed by the company to vendors or suppliers, and the goal is to ensure accuracy in the balances recorded.
2. Identify the most appropriate procedure: The correct procedure involves comparing the accounts payable ledger to vendor statements and confirming balances directly with vendors. This ensures that the company's records match the vendor's records and helps identify discrepancies.
3. Clarify why other options are less relevant: For example, verifying the bank's ending balance with the company's general ledger cash account is related to cash reconciliation, not accounts payable. Similarly, matching the cash receipts journal to the bank statement deposits pertains to cash inflows, not payables. Recalculating outstanding checks is part of reconciling the bank statement, not confirming accounts payable.
4. Explain the importance of the correct procedure: Comparing the accounts payable ledger to vendor statements ensures that the company is accurately recording its liabilities. Confirming balances directly with vendors provides external validation and helps prevent errors or fraud.
5. Summarize the process: To confirm accounts payable during a bank reconciliation, focus on reconciling the accounts payable ledger with vendor statements and directly confirming balances with vendors. This ensures the accuracy and reliability of the company's financial records.