EX 8-16Bank reconciliation Identify each of the following reconciling items as:

Question

EX 8-16Bank reconciliation Identify each of the following reconciling items as: (a) an addition to the cash balance according to the bank statement, (b) a 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. (None of the transactions reported by bank debit and credit memos have been recorded by the company.) 1. Bank service charges, $30. 2. Check of a customer returned by bank to company because of insufficient funds, $400. 3. Check for $320 incorrectly recorded by the company as $230. 4. Check for $1,100 incorrectly charged by bank as $110. 5. Deposit in transit, $3,300. 6. Outstanding checks, $7,950. 7. Note collected by bank, $10,500. OBJ.5

Explanation / Answer

1) Deduction from the cash balance according to the bank statement.

2) Addition to the cash balance according to the bank statement.

3)Deduction from the cash balance according to the companys records.

4)Deduction from the cash balance according to the bank statement..

5)Addition to the cash balance according to the bank statement.

6)Deduction from the cash balance according to the bank statement.

7)Addition to the cash balance according to the bank statement.

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