Question

If a check correctly written and paid by the bank for $584 is incorrectly recorded on the company's books for $548, the appropriate treatment on the bank reconciliation would be to

A) deduct $36 from the book's balance.
B) add $36 to the book's balance.
C) deduct $36 from the bank's balance.
D) deduct $584 from the book's balance.

Answer 1

The appropriate treatment on the bank reconciliation would be to deduct $36 from the book's balance (option A).

Step-by-step explanation:

The appropriate treatment on the bank reconciliation would be to deduct $36 from the book's balance (option A).

When a check is correctly written and paid by the bank but recorded incorrectly on the company's books, there is a discrepancy between the bank's records and the company's records. In this case, the check was recorded for $548 on the company's books instead of the correct amount of $584.

To adjust for this error on the bank reconciliation, the incorrect amount of $548 needs to be deducted from the book's balance to align it with the correct amount of $584.