Based on the following information,what account would be subtracted from the bank-balance side of a checking-account reconcilation?
Service charge $12,Outstanding checks $145,Interest $$ 3.50,Deposit in transit $80
a)$145
b)$12
c)$157
d)$148.50
IS C RIGHT ANSWER?THANK YOU:)))
d) $148.50
I agree with you.
Interest is incoming; deposit in transit is not yet a fact for the bank.
To determine which account would be subtracted from the bank-balance side of a checking account reconciliation, you need to identify the items that reduce the bank balance. These items include outstanding checks and service charges.
Looking at the information given:
- Service charge ($12) should be subtracted from the bank balance, as it reduces the balance.
- Outstanding checks ($145) should also be subtracted, as they have not yet cleared the bank and reduce the balance.
However, the other two items, interest ($3.50) and deposit in transit ($80), do not affect the bank balance, so they do not need to be subtracted.
Therefore, the correct answer is d) $148.50, which is the sum of the service charge ($12) and the outstanding checks ($145).