Question

The bank collected $1,500 for the company from the company's client. On a bank reconciliation, this would be shown as a(n)

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

Answer 1

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

Step-by-step explanation:

The bank collected $1500 from the customer on behalf of the company. The amount was posted to the customer's account, increasing the company's bank balance by $1500. When the bank generates the customer's statement, the collected amount will reflect in the customer statement increasing it by $1500.

To reconcile the customer bank statements, and the customer's ledger, the amount of $1500 will have to be added to the customer's cash balance.