The accountant for a local manufacturing company is reconciling the company’s bank account for May. For each item listed, state how it would be handled on a bank reconciliation. (Choices may be used more than once.)
-Bank service charge on the bank statement for new checks
A)Addition to bank balance
B)Subtraction from bank balance
C)Addition to company balance
D)Subtraction from company balance
E)Not included on the reconciliation

Question

Quizplus · Accepted Answer

Bank service charges on the bank statement for new checks are expenses that the company has incurred but may not have recorded in its books yet. Therefore, they are subtracted from the company's balance in the reconciliation process to reflect the decrease in the company's cash balance due to these charges.

The Accountant for a Local Manufacturing Company Is Reconciling the Company’s