Question

Assign the letter to indicate whether the following items would be added or subtracted from the company's books or the bank statement during the construction of a bank reconciliation.

1. Outstanding checks
2. Bank service charge
3. Deposit in transit
4. NSF check
5. EFT deposit from a customer
6. Charges for some other company's safe deposit box were posted to your account
7. A $1,000 note from one of your customers was collected by the bank
8. Interest revenue earned by the note above
a. Added to the bank statement balance
b. Subtracted from the bank statement balance
c. Added to the company's books
d. Subtracted from the company's books

Answer 1

1.b

2.d

3.a

4.d

5.c

6.d

7.c

8.a

Step-by-step explanation:

The following Adjustments are usually made in Company`s Cash Book :

1. Payments made automatically by the bank on behalf of the Company
2. Company`s Bank Charges
3. Interest on Amounts
4. Deposits received by the Bank on Behalf of the Company
5. Dishonored Checks (NSF)

The following adjustments are usually made to the Bank Statement Balance

1. Outstanding Cheques
2. Deposits in Transit