Question

Upon preparing the bank reconciliation statement, an adjusting entry was made that debited cash and credited interest revenue. Therefore the bank reconciliation must have included an item that was:

Select one:
a. deducted from the cash ledger balance
b. added to the cash ledger balance
c. added to the bank statements
d. deducted from the bank statement

Answer 1

When preparing a bank reconciliation statement, an adjusting entry was made that debited cash and credited interest revenue. Therefore, the bank reconciliation must have included an item that was added to the cash ledger balance.

Step-by-step explanation:

When preparing a bank reconciliation statement, an adjusting entry was made that debited cash and credited interest revenue.

This means that the bank reconciliation must have included an item that was added to the cash ledger balance.

The entry increased the cash balance in the cash ledger in order to match it with the balance shown on the bank statement.