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College Accounting, Chapters 1-27

23rd Edition
HEINTZ + 1 other
ISBN: 9781337794756

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Chapter
Section
BuyFindarrow_forward

College Accounting, Chapters 1-27

23rd Edition
HEINTZ + 1 other
ISBN: 9781337794756
Textbook Problem

Indicate how each of the following items should be treated in a bank reconciliation by entering the correct letter in the spaces provided.

  1. a. Add to bank statement balance
  2. b. Subtract from bank statement balance
  3. c. Add to book balance
  4. d. Subtract from book balance

_____ 1. Interest earned on checking account balance

_____ 2. Error in checkbook whereby a check for $82 was entered in the checkbook as $28

_____ 3. Deposit in transit

_____ 4. Outstanding checks

To determine

Indicate the manner by which the given items should be treated in bank reconciliation by entering the correct letter in the spaces provided.

Explanation

Bank reconciliation:

Bank statement is prepared by bank. The company maintains its own records from its perspective. This is why the cash balance per bank and cash balance per books seldom agree. Bank reconciliation is the statement prepared by company to remove the differences and disagreement between cash balance per bank and cash balance per books.

Indicate the manner by which the given items should be treated in bank reconciliation by entering the correct letter in the spaces provided.

ItemsTreatment in bank reconciliation
1. Interest earned on checking account balance.c. Add to the book balance.
2. Error in checkbook whereby a check for $82 was entered in the checkbook as $28.d. Subtract from book balance
3. Deposit in transit.a. Add to bank statement balance
4. Outstanding checksd...

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