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Items on company's bank statement The following item may appear on a bank statement: 1. Bank correction of an error from recording a $6,200 deposit as $2,600 2. EFT payment 3. Note collected for company 4. Service charge Using the following format, indicate whether each item would appear as a debit or credit memo on the bank statement and whether the item would increase or decrease the balance of the company's account: Appears on the Bank Statement as Increases or Decreases the a Debit or Credit Balance of the Company's Item No. Memo Bank Account
Financial & Managerial Accounting
Solutions
Financial & Managerial Accounting
Items on company's bank statement
The following item may appear on a bank statement:
- 1. Bank correction of an error from recording a $6,200 deposit as $2,600
- 2. EFT payment
- 3. Note collected for company
- 4. Service charge
Using the following format, indicate whether each item would appear as a debit or credit memo on the bank statement and whether the item would increase or decrease the balance of the company's account:
| Appears on the | ||
| Bank Statement as | Increases or Decreases the | |
| a Debit or Credit | Balance of the Company's | |
| Item No. | Memo | Bank Account |
Bank Reconciliation Statement: 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.
To determine: Whether items appear as debit/credit memo on the bank statement and whether items increase/decrease the balance of the company’s account.
Explanation of Solution
In the bank records, company’s account has a credit balance. The following are items that shows increase in the company’s account.
- Bank correction of an error
- EFT Payment
- Note collected for a company
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