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.

Principles of Accounting Volume 1
19th Edition
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax
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:

  1. Outstanding checks, $670.
  2. Deposits in transit, $1,500.
  3. NSF check from customer, no. 548, for $175.
  4. Bank collection of note receivable of $800, and interest of $80.
  5. Interest earned on bank balance, $20.
  6. Service charge, $10.
  7. The business credited Cash for $200. The correct amount was $2,000.
  8. 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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