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Select Best of the Following Reconciling Items as (A) an Addition

Question 192

Matching

Select best of the following reconciling items as (a) an addition to the cash balance according to the bank statement, (b) deduction from the cash balance according to the bank statement, (c) an addition to the cash balance according to the company's records, or (d) a deduction from the cash balance according to the company's records. Assume that none of the transactions reported by bank debit and credit memos have been recorded by the company. Also, indicate by writing "entry" by those items that will require a journal entry in the company's accounts.

Premises:
Bank service charges.
NSF check.
Check for $420 incorrectly recorded by the company as $240.
Outstanding checks.
Check for $690 incorrectly recorded by the company as $960.
Deposits in transit.
Responses:
an addition to the cash balance according to the bank statement
deduction from the cash balance according to the bank statement
an addition to the cash balance according to the company’s records
a deduction from the cash balance according to the company’s records.

Correct Answer:

Bank service charges.
NSF check.
Check for $420 incorrectly recorded by the company as $240.
Outstanding checks.
Check for $690 incorrectly recorded by the company as $960.
Deposits in transit.
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