Sparrow Corporation
The items listed below were identified while preparing a bank reconciliation for the checking account of Sparrow Corporation as of March 31, 2012.

-Refer to the information presented for Sparrow Corporation. How will the customer's bounced checks be handled within a bank reconciliation?
A) Add to the balance from the company records
B) Subtract from the balance from the company records
C) Add to the bank statement balance
D) Subtract from the bank statement balance

Question

Sparrow Corporation 
The items listed below were identified while preparing a bank reconciliation for the checking account of Sparrow Corporation as of March 31, 2012.
 
-Refer to the information presented for Sparrow Corporation. How will the customer's bounced checks be handled within a bank reconciliation?
A) Add to the balance from the company records 
B) Subtract from the balance from the company records 
C) Add to the bank statement balance 
D) Subtract from the bank statement balance

Quizplus · Accepted Answer

Bounced checks are subtracted from the balance in the company's records because they represent funds that were previously recorded as received but are not actually available.

Sparrow Corporation The Items Listed Below Were Identified While Preparing a Bank