An outstanding check is a check or demand deposit that has been authorized and written, but the payee has not cashed the check. The payee has not collected his money.
Let’s say you started with $400 in the bank. You wrote three checks for $100 each, but only two people cashed their checks. Your bank statement would show a balance of $200. Since the third $100 check was not cashed, it does not show up on your bank statement. The bank has no idea you wrote it. It is an outstanding check.
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