On its bank reconciliation, how
While performing its monthly bank reconciliation, XYZ Inc. discovered that it recorded a cash receipt from a customer for an incorrect amount. The company debited “Cash” and credited “Sales Revenue” for $920 instead of $290.
On its bank reconciliation, how should the company adjust for this error?
- Add $630 to the company (book) side.
- Subtract $630 from the company (book) side.
- Add $630 to the bank side.
- Subtract $630 from the bank side.
Transposition Error
When a bookkeeper mistakenly records two consecutive digits in the wrong order when documenting transactional data, this is referred to as a transposition error. Even while this mistake may appear to be of a minor nature, it frequently leads to significant financial discrepancies that can have a significant effect in other areas. Transposition problems could be passed on to external parties such as the Internal Revenue Service or business shareholders if a corporation doesn't identify and fix them.
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