Question

In a bank reconciliation, an EFT cash receipt is:

a) deducted from the bank balance on the bank statement
b) added to the bank balance in the general ledger
c) added to the bank balance on the bank statement
d) deducted from the bank balance in the general ledger

Answer 1

An EFT cash receipt in bank reconciliation is added to the bank balance in the general ledger, as it represents funds that have already been received by the bank but may not yet be recorded in the company's books. The correct option is b.

Step-by-step explanation:

When performing a bank reconciliation, an EFT (Electronic Funds Transfer) cash receipt is an instance where money has been transferred to the company's bank account electronically. As per accounting practices, this would be considered as an increase in the company's available funds.

Therefore, the correct answer is: b) added to the bank balance in the general ledger. This is because the bank has already recognized the receipt and increased your company's bank balance accordingly, but this may not yet be recorded in the company's books.

Adding the EFT cash receipt to the general ledger balance adjusts the company's records to match the bank's records. The correct option is b.