In a bank reconciliation, what happens to the outstanding checks of the previous month?

Unless they are cashed you must carry them on the balance sheet on the credit side.

Outstanding Chqs were credited in your Bank Book but still not presented to the bank will different balances in bank book and bank statement. You cant change the bank records make adjustment in your own record. If you are starting from the Bank Book Balance add these chqs back to the Bank Book if you are starting from Bank Balance deduct these from that.

An outstanding check is a check that has been written by a company (and deducted from the appropriate general ledger cash account) but it has not yet cleared the bank account on which it is drawn. Hence, outstanding checks will mean that the balance in the bank account will be greater than the balance in the general ledger account (or in an individual's check register).

In the bank reconciliation process, the total amount of outstanding checks is subtracted from the ending balance on the bank statement when computing the adjusted balance per bank.