Question

Required information A bank reconciliation proves the accuracy of the depositor's and the bank's records. The bank statement balance is adjusted for items such as outstanding checks and unrecorded deposits made on or before the bank statement date but not reflected on the statement. The book balance is adjusted for items such as service charges, bank collections for the depositor, and interest earned on the account. Khowreage Cnet T Select the items below which must be adjusted to the book balance: (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect) ? deposits in transit ? book error ? bank error ? outstanding checks ? interest earned on checking account ? collections of accounts receivable by the bank

Answer 1

Adjustments to the book balance during a bank reconciliation include service charges, collections of accounts receivable by the bank, interest earned on the checking account, and any book errors. Deposits in transit and outstanding checks are adjusted on the bank statement, and bank errors are corrected by the bank.

Step-by-step explanation:

When reconciling a bank statement with a company's book balance, certain items must be adjusted on the company's books (the book balance). These adjustments ensure both records reflect all transactions accurately. The items that need to be adjusted on the book balance include:

Service charges - Fees the bank charges which may not yet be recorded in the books.

Collections of accounts receivable by the bank - Monies the bank collects on behalf of the company, such as note receivables.

Interest earned on checking account - Interest income that has not been accounted for in the books.

Book errors - Errors made in the company's records that need to be corrected.

Items like deposits in transit and outstanding checks are adjustments on the bank statement side, and bank errors would be rectified by the bank rather than the depositor's records.

Answer 2

The following items require adjustment in Book value:

* Book Error

* Interest earned on the Checking account

* Collections of Accounts receivable by the bank.

Explanation:

These above items require adjustment in book balance to compute the adjusted book balance.