Question

The bank paid $6.45 in interest income to the company. On a bank reconciliation, this would be shown as a(n)

A. decrease in the ledger cash account balance (book balance)
B. decrease in the bank account balance
C. increase in the bank account balance
D. increase in the ledger cash account balance (book balance)

Answer 1

D. increase in the ledger cash account balance (book balance)

Step-by-step explanation:

The $6.45 paid by the customer represents an income to the customer. It is interest earned by the company. The amount is reflecting on the customer bank statement. It means the customer's bank balance is more by $6.75 compared to the books balance. To reconcile the accounts, this amount should be added to the customer's ledger to increase the book's balance.