On its bank reconciliation, how

Financial And Managerial Accounting
15th Edition
ISBN:9781337902663
Author:WARREN, Carl S.
Publisher:WARREN, Carl S.
Chapter7: Internal Control And Cash
Section: Chapter Questions
Problem 22E
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While performing its monthly bank reconciliation, XYZ Inc. discovered that it recorded a cash receipt from a customer for an incorrect amount. The company debited “Cash” and credited “Sales Revenue” for $920 instead of $290.

On its bank reconciliation, how should the company adjust for this error?

  1. Add $630 to the company (book) side.
  2. Subtract $630 from the company (book) side.
  3. Add $630 to the bank side.
  4. Subtract $630 from the bank side.
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