The following items could appear on a bank reconciliation: Outstanding checks, $670. Deposits in transit, $1,500. NSF check from customer, no. 548, for $175. Bank collection of note receivable of $800, and interest of $80. Interest earned on bank balance, $20. Service charge, $10. The business credited Cash for $200. The correct amount was $2,000. The bank incorrectly decreased the business’s account by $350 for a check written by another business. Classify each item as (1) an addition to the book balance, (2) a subtraction from the book balance. (3) an addition to the bank balance, or (4) a subtraction from the bank balance.
The following items could appear on a bank reconciliation: Outstanding checks, $670. Deposits in transit, $1,500. NSF check from customer, no. 548, for $175. Bank collection of note receivable of $800, and interest of $80. Interest earned on bank balance, $20. Service charge, $10. The business credited Cash for $200. The correct amount was $2,000. The bank incorrectly decreased the business’s account by $350 for a check written by another business. Classify each item as (1) an addition to the book balance, (2) a subtraction from the book balance. (3) an addition to the bank balance, or (4) a subtraction from the bank balance.
Chapter8: Fraud, Internal Controls, And Cash
Section: Chapter Questions
Problem 11EB: Using the following information, prepare a bank reconciliation. Bank balance: $12,565. Book...
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The following items could appear on a bank reconciliation:
- Outstanding checks, $670.
- Deposits in transit, $1,500.
- NSF check from customer, no. 548, for $175.
- Bank collection of note receivable of $800, and interest of $80.
- Interest earned on bank balance, $20.
- Service charge, $10.
- The business credited Cash for $200. The correct amount was $2,000.
- The bank incorrectly decreased the business’s account by $350 for a check written by another business.
Classify each item as (1) an addition to the book balance, (2) a subtraction from the book balance. (3) an addition to the bank balance, or (4) a subtraction from the bank balance.
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