In reconciling the bank balance, the amount of an unrecorded bank service charge should be:
A) Added to the book balance of cash.
B) Deducted from the book balance of cash.
C) Added to the bank balance of cash.
D) Deducted from the bank balance of cash.
E) Noted as a memo.

Question

Quizplus · Accepted Answer

Bank service charges are expenses that have been deducted by the bank but not yet recorded in the company's book. Therefore, to reconcile the bank balance, these charges should be deducted from the book balance of cash to reflect the actual available cash balance.

In Reconciling the Bank Balance, the Amount of an Unrecorded