Question

51) EXTRA CREDIT Following are seven items a through g that would cause Rembrandt Company's book balance of cash to differ from its bank statement balance of cash. a. A service charge imposed by the bank. b. A check listed as outstanding on the previous period's reconciliation and still outstanding at the end of this month. c. A customer's check returned by the bank is marked "Not Sufficient Funds (NSF)". d. A deposit mailed to the bank on the last day of the current month and not recorded on this month's bank statement, e. A check paid by the bank at its correct $190 amount recorded in error in the company's check register at $109. f. An unrecorded credit memorandum indicating that bank collected a note receivable for Rembrandt Company and deposited the proceeds in the company's account. g. A check written in the current period that is not yet paid or returned by the bank. Indicate where each item, letters a-g, would appear on Rembrandt Company's bank reconciliation by placing its identifying letter in the parentheses in the proper section of the form below. Bank statement cash balance Add: Book balance of cash Add: O Deduct: Deduct: O IO Reconciled balance Reconciled balance

Answer 1

Solution:

Bank Statement cash balance		Book Balance of Cash
Add:	(d)	Add:	(f)
	( )		( )
	( )		( )
Deduct:	(b)	Deduct:	(a)
	(g)		(c)
	( )		(e)
Reconciled balance		Reconciled balance