Question

Knowledge Check 01 

Select the items below which must be adjusted to the book balance: You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect) 

• deposits in transit 

• book error 

• break error

• outstanding checks 

• interest earned on checking account
  

• collections of accounts receivable by the bank

Answer 1

Solution:

The Answer are

1) Book Error

2) Interest Earned on checking account

3) Collection of account receivables by the bank

Explanation:

1) Book Error needs to be adjusted to book balance only.

2) Interest earned on checking account, Checking account are same as savings account with more liquidity. So, Interest earned on those accounts will be adjusted by banks at the same time but we have to adjust that amount in our book balance after we know the exists of that transaction.

3) Collection of account receivables by the bank, it will come under bank credits. so, we have to adjust that amount in our book balance after we know the exists of that transaction.

4) Deposits in transit and Outstanding checks are already adjusted in book balance. So, there need to be adjusted in bank balance now.

5) Bank Error needs to be adjusted to bank balance only.