If a check correctly written and paid by the bank for $272 is incorrectly recorded in the company's books for $227,how should this error be treated on the bank reconciliation?
A)Subtract $45 from the bank's balance.
B)Add $45 to the bank's balance.
C)Subtract $45 from the book balance.
D)Add $45 to the book balance.
E)Subtract $45 from the bank's balance and add $45 to the book's balance.

Question

Quizplus · Accepted Answer

The error is in the company's books, not the bank's records. The company recorded $227 instead of $272, so $45 needs to be subtracted from the book balance to correct the error.

If a Check Correctly Written and Paid by the Bank