While performing the monthly bank reconciliation, the bookkeeper for Rathbun Poo

Question

While performing the monthly bank reconciliation, the bookkeeper for Rathbun Pool Supply Company made the journal entry for a bank service charge of $49. Which of the following correctly shows the effect of the entry on the financial statements?

  

  

Multiple Choice

Choice B

Choice C

Choice A

Choice D

| Assets | = Liab. Equ. | Rev. | - | Expenses |-Net Inc. | Cash A) B) C) D) ? NA 1-1(49)|+| 49| 49|-| NA | =| 49 | 490A (49 ) | = | NA | + | (49) | NA | | 49 |_ (49) | (49) OA (49) | = | 49 | + | NA | NA | - | NA 49NA 49 49 =| NA | (49) (A 49 OA NA 49

Explanation / Answer

Answer : Choice A

Decrease in cash at bank - Asset  

Increase in Expense

Decrease in net income and it affects decrease in equity

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