indicate whether the following items in a bank reconciliation should be: A)Added to the check book blance B) DEDUCTED FROM THE CHECKBOOK C)added to the bank statement balance D) deducted from the bank statement balance
1) deposit of 1,250 that was recorded incorrectly in the check book s 1,200.i think its c. 2)interest earned by the company on an investment and automically deposited to the company account. my ans. was a im i right please correct.
1. OK. Now I see you only want what the bank reconciliation should be. The bank will not have access to your check book.
If it was deposited incorrectly in the check book, YOU would have done that. The bank will not know what you entered because they don't see your checkbook. IT will not appear on the bank statement balance? You'll need to do b.
Let me go back to the original post.
Sra
To determine whether an item should be added or deducted from the checkbook balance or the bank statement balance, you need to understand the purpose of a bank reconciliation.
A bank reconciliation is a process of comparing the bank statement balance with the checkbook balance in order to identify any differences and reconcile them. The goal is to ensure that both balances match and to identify any outstanding checks, deposits, or bank errors.
Now, let's go through each scenario you provided:
1) Deposit of $1,250 that was recorded incorrectly in the checkbook as $1,200.
In this case, the correct amount should be $1,250, but it was recorded as $1,200 in the checkbook. Therefore, you need to add the difference of $50 to the checkbook balance. The correct answer would be A) Added to the checkbook balance.
2) Interest earned by the company on an investment and automatically deposited to the company account.
When interest is earned on an investment, it is considered additional income that increases the company's funds. Therefore, it should be added to the company's checkbook balance. The correct answer would be A) Added to the checkbook balance.
To summarize:
1) Deposit of $1,250 that was recorded incorrectly in the checkbook as $1,200: Add $50 to the checkbook balance (Option A).
2) Interest earned by the company on an investment and automatically deposited to the company account: Add the interest amount to the checkbook balance (Option A).
Remember, the purpose of a bank reconciliation is to ensure that both the checkbook balance and the bank statement balance match. By understanding the nature of each item and applying the correct adjustments, you can reconcile the balances and ensure accuracy in your financial records.