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The month-end journal entry to adjust its cash balance to agree to the adjusted book balance should include a: a) debit to interest revenue for $125 b) credit to service revenue for $4000 c) credit to bank service charge expense for $35 d) credit to note receivable for $2500

The month-end journal entry to adjust its cash balance to agree to the adjusted book balance should include a: a) debit to interest revenue for $125 b) credit to service revenue for $4000 c) credit to bank service charge expense for $35 d) credit to note receivable for $2500

Principles of Accounting Volume 1
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 month-end journal entry to adjust its cash balance to agree to the adjusted book balance should include a: a) debit to interest revenue for $125 b) credit to service revenue for $4000 c) credit to bank service charge expense for $35 d) credit to note receivable for $2500
Item Description a. The July 31 balance per the bank statement is $5,000. b. The unadjusted book balance on July 31 is $4,670. C. Interest earned from the bank amounted to $25. d. Bank service charges amounted to $35. e. Deposits in transit amount to $4,000. f. There was an NSF check from one of Wells's customers for $900. g. Outstanding checks total $2,700. h. 1. A collection on an interest-bearing note receivable by the bank on behalf of the company amounted to $2,600. Out of the $2,600 collected, $2,500 was principal, and $100 was for interest earned. The interest amount was not previously accrued. The bank incorrectly deducted $60 from Wells' bank account. 1. After preparing the bank reconciliation for July on your scrap paper, the adjusted book balance on July 31 should be: A. $6,690 B. $6,360 C. $6,240 D. $6,300 E. $6,420 F. None of the above
Transcribed Image Text:Item Description a. The July 31 balance per the bank statement is $5,000. b. The unadjusted book balance on July 31 is $4,670. C. Interest earned from the bank amounted to $25. d. Bank service charges amounted to $35. e. Deposits in transit amount to $4,000. f. There was an NSF check from one of Wells's customers for $900. g. Outstanding checks total $2,700. h. 1. A collection on an interest-bearing note receivable by the bank on behalf of the company amounted to $2,600. Out of the $2,600 collected, $2,500 was principal, and $100 was for interest earned. The interest amount was not previously accrued. The bank incorrectly deducted $60 from Wells' bank account. 1. After preparing the bank reconciliation for July on your scrap paper, the adjusted book balance on July 31 should be: A. $6,690 B. $6,360 C. $6,240 D. $6,300 E. $6,420 F. None of the above
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