A debit memorandum appeared on Mallory's bank statement for the month of May. How will Mallory treat this amount on the May bank reconciliation?
A) Add it to the company's balance.
B) Add it to the bank balance.
C) Deduct it from the company's balance.
D) Deduct it from the bank balance.

Question

Quizplus · Accepted Answer

A debit memorandum on a bank statement indicates that the bank has decreased the account holder's balance for a specific reason, such as a service charge or insufficient funds. Therefore, the debit memorandum should be deducted from the company's balance on the bank reconciliation to determine the correct ending balance.

A Debit Memorandum Appeared on Mallory's Bank Statement for the Month