Question

The important last step in the process of preparing a bank reconciliation is to make the necessary journal entries. Which of the following accounts is always involved in these entries?

1) cash
2) bank service charges
3) notes receivables
4) interest earned

Answer 1

Cash

The account always involved in the journal entries for bank reconciliation is the

Cash account because the process aims to reconcile the company's cash balance per books with the bank's balance.

Step-by-step explanation:

The important last step in the process of preparing a bank reconciliation is to make the necessary journal entries to adjust the company's cash account in the general ledger and bring it into agreement with the reconciled bank balance.

Cash is the account always involved in these journal entries since bank reconciliation involves reconciling the balance per bank with the balance per books for the cash account.

While there can be several accounts affected by the reconciliation process, such as bank service charges, interest earned, or adjustments related to notes receivable, these do not feature in every single reconciliation.

Rather, they are dependent on the particular reconciling items noted during the review of the bank statement and the company's records.

Therefore, the cash account is the central account affected because it reflects all transactions that increase or decrease a company's cash.