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College Accounting, Chapters 1-27

23rd Edition
HEINTZ + 1 other
ISBN: 9781337794756

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BuyFindarrow_forward

College Accounting, Chapters 1-27

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

BANK RECONCILIATION PROCEDURES In a format similar to the following, indicate whether the action at the left will result in an addition to (+) or subtraction from (−) the ending bank balance or the ending book balance.

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To determine

Indicate whether the action at the left will result in an addition to (+) or subtraction from () the ending bank balance or the ending book balance.

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 whether the action at the left will result in an addition to or subtraction from the ending bank balance or the ending book balance.

TransactionEnding bank balanceEnding book balance
1. Deposits in transit to the bankAdded  (+) 
2. Error in checkbook: check recorded as $32 but was actually for $23 Added  (+)
3. Service fee charged by the bank 

Subtracted

()

4. Outstanding checks

Subtracted

()

 
5. NSF check deposited earlier 

Subtracted

()

6. Error in checkbook: check recorded as $22 but was actually for $220 

Subtracted

()

7

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