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The bank charges another company's deposit to our account. This would be included on the bank reconciliation as an?

1) Addition
2) Deduction
3) Correction
4) Omission

1 Answer

5 votes

Final answer:

The bank charges another company's deposit to our account, which should be recorded in the bank reconciliation as a deduction. It is an error that needs to be corrected by the bank.

Step-by-step explanation:

When a bank erroneously credits an account with a deposit that belongs to another company, this transaction should be recorded in the bank reconciliation as a deduction. This is because the deposit increases the account balance without a corresponding business transaction. Once the error is noticed, the bank is obligated to correct the mistake, thereby reducing the account balance by the amount of the erroneous deposit.

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