Question

The bank credited your account for a deposit that should have been deposited into another customer's bank account. What will this do to the bank reconciliation?

Answer 1

An erroneous credit in your bank account due to a deposit meant for someone else will temporarily inflate your balance, causing a discrepancy in the bank reconciliation process until the error is identified and corrected by the bank.

Step-by-step explanation:

When the bank erroneously credits your account with a deposit meant for another customer, it will affect your bank reconciliation process. A bank reconciliation involves matching the balance on your bank statement with the balance in your accounting records. You would initially see an inflated balance in your bank account, but this amount would not be reflected in your accounting records, leading to a discrepancy. The bank will eventually discover the error and debit your account accordingly, at which point your bank balance will decrease by the mistakenly credited amount. To reconcile your account accurately during this period, you'll need to identify the error, understand it's not part of your actual funds, and adjust your records to reflect the accurate balance after the bank corrects the mistake.