A table for a monthly bank reconciliation dated September 30 is given below. For each item 1 through 12, indicate whether the item should be added to or deducted from the book or bank balance, or whether it should not appear on the reconciliation.Options:Addition to Bank BalanceAddition to Book Balance CR to CashAddition to Book Balance DR to CashDeduction from Bank BalanceDeduction from Book Balance CR to CashDeduction from Book Balance DR to CashNot included on Bank Reconciliation 1. NSF check from customer is returned on September 25 but not yet recorded by this company. Deduction from Book Balance DR to Cash2. Interest earned on the September cash balance in the bank.Addition to Book Balance CR to Cash3. Deposit made on September 5 and processed by the bank on September 6.Not included on Bank Reconciliation4. Checks written by another depositor but charged against this company's account.Addition to Bank Balance5. Bank service charge for September.Deduction from Bank Balance6. Checks outstanding on August 31 that cleared the bank in September.Check written against the company's account and cleared by the bank; erroneously not7.recorded by the company's recordkeeper.Principal and interest on a note receivable to this company is collected by the bank but not yet8.recorded by the company.9. Checks written and mailed to payees on October 2.10. Checks written by the company and mailed to payees on September 30.11. Night deposit made on September 30 after the bank closed.12. Special bank charge for collection of note in part 8 on this company's behalf.

Sometimes due to certain reasons the balance of the cash book and the bank statement doesn't…

Answered: 1. NSF check from customer is returned…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

A table for a monthly bank reconciliation dated September 30 is given below. For each item 1 through 12, indicate whether the item should be added to or deducted from the book or bank balance, or whether it should not appear on the reconciliation.

Options:

Addition to Bank Balance
Addition to Book Balance CR to Cash
Addition to Book Balance DR to Cash
Deduction from Bank Balance
Deduction from Book Balance CR to Cash
Deduction from Book Balance DR to Cash
Not included on Bank Reconciliation

1. NSF check from customer is returned on September 25 but not yet recorded by this company. Deduction from Book Balance DR to Cash
2. Interest earned on the September cash balance in the bank.
Addition to Book Balance CR to Cash
3. Deposit made on September 5 and processed by the bank on September 6.
Not included on Bank Reconciliation
4. Checks written by another depositor but charged against this company's account.
Addition to Bank Balance
5. Bank service charge for September.
Deduction from Bank Balance
6. Checks outstanding on August 31 that cleared the bank in September.
Check written against the company's account and cleared by the bank; erroneously not
7.
recorded by the company's recordkeeper.
Principal and interest on a note receivable to this company is collected by the bank but not yet
8.
recorded by the company.
9. Checks written and mailed to payees on October 2.
10. Checks written by the company and mailed to payees on September 30.
11. Night deposit made on September 30 after the bank closed.
12. Special bank charge for collection of note in part 8 on this company's behalf.

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