If a bank statement includes an EFT payment of $945 for insurance, the journal entry to record this reconciling item should include a:
A)debit to Cash for $945.
B)debit to Accounts Payable for $945.
C)credit to Cash for $945.
D)credit to Prepaid Insurance for $945.

Question

Quizplus · Accepted Answer

The EFT payment for insurance reduces the cash balance, so the correct journal entry would be to credit Cash for $945.

If a Bank Statement Includes an EFT Payment of $945