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vice Charges 5.00 ceivable ng Expense 27.00 2,000.00 27.00

vice Charges 5.00 ceivable ng Expense 27.00 2,000.00 27.00

FINANCIAL ACCOUNTING
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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The following data was extracted from the accounting records of Wise Company: Adjusting journal entries made by Wise after preparing the December bank reconciliation were as follows: Dr. Cash Dr. Bank Service Charges 5.00 Cr. Notes Receivable Dr. Cash Cr. Advertising Expense 1,995.00 Cr. Cash 27.00 Dr. Accounts Receivable 450.00 2,000.00 27.00 450.00 Dr. Bank Service Charges Expense 42.50 Cr. Cash 42.50 Other information: The Balance Per books November 30 was $18,434.27 Deposits in transit at December 31 were $2,145.40 An error made by the bank on the December bank statement was detected. It had charged a cheque written by another bank client (Wiese Company) against Wise Company's bank balance. The Bank has been notified and agrees it is indeed their error. The amount was $30.50 Outstanding cheques were $1,938.53 There were no other reconciling items not reflected above The journal entry for the $450 probably represents: Multiple Choice A deposit made by Wise which was not recorded on the bank statement Collection of a receivable on Wise's behalf An NSF cheque Some other explanation An outstanding cheque written by Wise which has not cleared the bank in December
Transcribed Image Text:The following data was extracted from the accounting records of Wise Company: Adjusting journal entries made by Wise after preparing the December bank reconciliation were as follows: Dr. Cash Dr. Bank Service Charges 5.00 Cr. Notes Receivable Dr. Cash Cr. Advertising Expense 1,995.00 Cr. Cash 27.00 Dr. Accounts Receivable 450.00 2,000.00 27.00 450.00 Dr. Bank Service Charges Expense 42.50 Cr. Cash 42.50 Other information: The Balance Per books November 30 was $18,434.27 Deposits in transit at December 31 were $2,145.40 An error made by the bank on the December bank statement was detected. It had charged a cheque written by another bank client (Wiese Company) against Wise Company's bank balance. The Bank has been notified and agrees it is indeed their error. The amount was $30.50 Outstanding cheques were $1,938.53 There were no other reconciling items not reflected above The journal entry for the $450 probably represents: Multiple Choice A deposit made by Wise which was not recorded on the bank statement Collection of a receivable on Wise's behalf An NSF cheque Some other explanation An outstanding cheque written by Wise which has not cleared the bank in December
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