Question

Bank Reconciliation: Identify whether the item should be added or subtracted from the bank balance or the company balance. Use the number (1-4) for your response. For instance, if the amount should be added to bank statement balance you would input 1. 1. Added to bank statement balance 2. Subtracted from bank statement balance 3. Added to company cash balance 4. Subtracted from company cash balance 5 6 7 8 Item Bank deducted too much out of the checking account Bank charge for new checks ordered for the checking account Interest earned on the checking account Checks written but have not cleared the bank yet

Answer 1

	Item	#
5	Bank deducted too much out of the checking account	1
6	Bank charge for new checks ordered for the checking amount	4
7	Interest earned on the checking account	3
8	Checks written but have not cleared the bank yet	2

5- Since due to this error, bank balance was reduced by mistake and hence it should be added to bank statement balance.

6- Due to bank charge, bank balance got reduced and hence now it should be subtracted from company cash balance.

7- Due to interest earned, bank balance got increased and hence not it should be added to company cash balance.

8- Since checks have been written and hence bank balance will get reduced. Thus it should be subtracted from bank statement balance.

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