Question

A check drawn by a depositor for $150 in payment of a liability was recorded in the journal as $510. This item would be included on the bank reconciliation as

a. a deduction from the balance per the bank statement.
b. an addition to the balance per the bank statement.
c. an addition to the balance per the depositor's records.
d. a deduction from the balance per the depositor's records.

Answer 1

When a check drawn for $150 is recorded as $510, it would be included on the bank reconciliation as a deduction from the balance per the depositor's records.

Step-by-step explanation:

When a check drawn by a depositor for $150 in payment of a liability is recorded in the journal as $510, it means that there is an error in the recording of the check amount. The check was recorded for a higher amount than it actually is.

In this case, the correct amount of the check should be $150. Therefore, it would be included on the bank reconciliation as a deduction from the balance per the depositor's records.