If a check correctly written and paid by the bank for ¥4,710 is incorrectly recorded on the company's books for ¥4,170, the appropriate treatment on the bank reconciliation would be to
A) add ¥540 to the book's balance.
B) subtract ¥540 from the book's balance.
C) deduct ¥540 from the bank's balance.
D) deduct ¥4,710 from the book's balance.

Question

Quizplus · Accepted Answer

Since the bank paid the correct amount of ¥4,710 but the company recorded it as ¥4,170, the company's book balance is overstated by ¥540. Therefore, we need to subtract ¥540 from the book's balance.

If a Check Correctly Written and Paid by the Bank