**Bank Reconciliation Detailed Information**This section provides essential details for understanding and performing bank reconciliation processes. The following points outline various factors that may affect the process:a. **Outstanding checks**: $670. - These are checks that have been written and recorded in the company's ledger but have not yet cleared the bank.b. **Deposits in transit**: $1,500. - These are deposits that have been recorded in the company's ledger but have not yet been processed by the bank.c. **NSF check from customer, no. 548**: $175. - This is a "Non-Sufficient Funds" check, meaning the customer did not have sufficient funds in their account to cover the check amount.d. **Bank collection of note receivable of $800, and interest of $80**. - The bank collected a note receivable on behalf of the business and also earned $80 in interest.e. **Interest earned on bank balance**: $20. - The business earned interest on its bank account balance.f. **Service charge**: $10. - The bank charged a fee for account maintenance or other services.g. **The business credited Cash for $200. The correct amount was $2,000**. - There was a recording error where the business credited an incorrect amount in the Cash account.h. **The bank incorrectly decreased the business's balance by $350 for a check written by another business**. - The bank made an error by deducting funds from the business's account for a check that did not pertain to them.Understanding these components is crucial for accurately reconciling the bank statement with the company's cash book records. It ensures that any discrepancies are identified and resolved timely, maintaining accurate financial records. **Bank Reconciliation Classification****Instruction:**Review the following items to determine their classification in a bank reconciliation process.*Click the icon to view the items.*Classify each item as:1. An addition to the book balance2. A subtraction from the book balance3. An addition to the bank balance4. A subtraction from the bank balance---(a) [Input field for classification]*Note: The specific details for each item need to be accessed by clicking the provided icon.*

Bank reconciliation is the process of comparing and matching the balances in a company's bank…

a. Outstanding checks, $670. b. Deposits in transit, $1,500. C. NSF check from customer, no. 548, for $175. d. Bank collection of note receivable of $800, and interest of $80. e. Interest earned on bank balance, $20. f. Service charge, $10. g. The business credited Cash for $200. The correct amount was $2,000. h. The bank incorrectly decreased the business's by $350 for a check written by another business.

a. Outstanding checks, $670. b. Deposits in transit, $1,500. C. NSF check from customer, no. 548, for $175. d. Bank collection of note receivable of $800, and interest of $80. e. Interest earned on bank balance, $20. f. Service charge, $10. g. The business credited Cash for $200. The correct amount was $2,000. h. The bank incorrectly decreased the business's by $350 for a check written by another business.

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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