Help Save & Exit Sub During the month of July. Clanton Industries issued a check

Question

Help Save & Exit Sub During the month of July. Clanton Industries issued a check in the amount of $956 to a supplier on ac count. The check did not clear the bank during July In preparing the July 31 bank reconcilation,the company should Multiple Choice Deduct the check amount from the book balance of cash. Aad the check arount to the bok balence of cash. Add the check amount to the book balence of cesh Deduct the check amount from the bank bolance Add the check amoum to the banik balance Make a joumal entry in the compeny records for an error

Explanation / Answer

Solution:

Check Issued but not cleared = $956

It means at the time of issuing check company would record the following entry:

Debit Accounts Receivable $956

Credit Cash (Book Balance of cash)

So the Book Balance of Cash was reduced by $956 but at the end of month, check was not cleared from the bank and to adjust the bank balance with book balance the Check Issued but not cleared added back to the book balance of cash.

So the correct option is “Add the check amount to the book balance of cash”

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