Accounting - what gets added to balance per books and whats gets subtracted?

Accounting - what gets added to balance per books and whats gets subtracted?

Postby bonar » Wed Mar 30, 2011 2:42 pm

this question confuses the hell out of me but its Which of the following would be subtracted from the balance per books on a bank reconciliation?
a. Outstanding checks
b. Deposits in transit
c. Notes collected by the bank
d. Service charges

now the answer is service charges but why? and also why isn't the answer outstanding checks? according to the cash balance bank reconciliation

url_not_allowed.4smallbusiness.com/free_forms/bank_reconciliation_form.cfm

i only see outstanding checks deducted. so why its outstanding checks not the answer?
bonar
 
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Accounting - what gets added to balance per books and whats gets subtracted?

Postby nathair89 » Wed Mar 30, 2011 2:43 pm

Answer:

d. Service charges
Service charges are charges made by the bank against the company account. It is deducted from the book balance because it isn't recognized by the company yet.

Outstanding check and deposit in transit are both bank reconciling items. Hence, no adjustment would be made on the book.

Notes collected is a book reconciling items, however, this is added instead of being deducted.
nathair89
 
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