Question

A deposit in transit on last period's bank reconciliation is shown as a deposit on the bank statement this period. As a result, in preparing this period's reconciliation, the amount of this deposit should be:

A. Added to the book balance of cash.
B. Deducted from the book balance of cash.
C. Added to the bank balance of cash.
D. Deducted from the bank balance of cash.
E. Not included as a reconciling item.

Answer 1

E

Step-by-step explanation:

The deposit clears itself out so is no longer a reconciliation item.

Answer 2

E. Not included as a reconciling item.

Step-by-step explanation: