If a check correctly written and paid by the bank for $491 is incorrectly recorded on the company's books for $419, the appropriate treatment on the bank reconciliation would be to
A) add $72 to the book's balance.
B) subtract $72 from the book's balance.
C) deduct $72 from the bank's balance.
D) deduct $491 from the book's balance.

Question

Quizplus · Accepted Answer

Since the check amount recorded on the company's books is lower than the actual paid amount, the company's book balance is understated by $72. Therefore, we need to subtract $72 from the book's balance on the bank reconciliation to correct the error.

If a Check Correctly Written and Paid by the Bank