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Accounting

27th Edition
WARREN + 5 others
ISBN: 9781337272094

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BuyFindarrow_forward

Accounting

27th Edition
WARREN + 5 others
ISBN: 9781337272094
Textbook Problem

Entries for bank reconciliation

Using the data presented in Exercise 8-18, journalize the entry or entries that should be made by the company.

To determine

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 journalize:  The entries that should be made by the company.

Explanation

Journal entry: Accounts payable recorded wrongly.

Date Accounts and Explanation Post Ref Debit ($) Credit ($)
20Y6
July 31 Cash 540
Accounts Payable 540
(Recorded accounts payable.)

Cash is an asset and the amount is increased as accounts payable is recorded wrongly. Therefore, increase Cash account with $540. Accounts payable is increased as there is a wrongly recorded. Hence, credit Accounts payable with $540.

Journal entry: Bank service charges of $20...

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