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. CashDr. Bank Service Charges 5.00Cr. Notes ReceivableDr. CashCr. Advertising Expense1,995.00Cr. Cash27.00Dr. Accounts Receivable 450.002,000.0027.00450.00Dr. Bank Service Charges Expense 42.50Cr. Cash42.50Other information:The Balance Per books November 30 was $18,434.27Deposits in transit at December 31 were $2,145.40An error made by the bank on the December bank statement was detected. It had charged a chequewritten by another bank client (Wiese Company) against WiseCompany's bank balance. The Bank has been notified and agrees it is indeed their error. The amount was$30.50Outstanding cheques were $1,938.53There were no other reconciling items not reflected aboveThe journal entry for the $450 probably represents:Multiple ChoiceA deposit made by Wise which was not recorded on the bank statementCollection of a receivable on Wise's behalfAn NSF chequeSome other explanationAn outstanding cheque written by Wise which has not cleared the bank in December

A bank Reconcilation statement summarizes the transactions of the cash statement as per the bank and…

Answered: vice Charges 5.00 ceivable ng Expense…

Business

Accounting

vice Charges 5.00 ceivable ng Expense 27.00 2,000.00 27.00

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

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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