Question

Question 1 View Policies Current Attempt in Progress The following reconciling items are applicable to the bank reconciliation for Forde Co. Indicate how each item should be shown on a bank reconciliation. (a) Outstanding checks. (b) Bank debit memorandum for service charge. Deducted from cash balance per bank Deducted from cash balance per books Added to cash balance per books Added to cash balance per bank (c) Bank credit memorandum for collecting from customer an electronic funds transfer. (d) Deposit in transit.

Answer 1

(a) Outstanding checks.	Deducted from cash balance per bank
(b) Bank debit memorandum for service charge.	Deducted from cash balance per books
(c) Bank credit memorandum for collection from customer an electronic funds transfer.	Added to cash balance per books
(d) Deposit in transit.	Added to cash balance per bank

(a) Outstanding checks are the checks written but not cleared so far. Hence these are deducted from the cash balance as per bank.

(b) Due to Bank debit memorandum for service charge cash balance reduces and hence it is deducted from cash balance as per books.

(c) Due to electronic fund collected by bank cash balance as per bank increases and hence it is added cash balance as per books

(d) Deposit in transit are the checks that have been deposited into bank but not credited so far. Hence these are added to cash balance as per bank.

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