A cheque of $75 deposited by a company was returned to the bank for nonsufficient funds. How would this information be included on the bank reconciliation?
A)An addition on the bank side
B)An addition on the book side
C)A deduction on the bank side
D)A deduction on the book side

Question

Quizplus · Accepted Answer

The cheque was initially recorded as a deposit in the company's books, increasing the cash balance. Since it was returned for nonsufficient funds, the deposit was not actually made, so the company must deduct $75 from its book balance to reconcile with the bank statement.

A Cheque of $75 Deposited by a Company Was Returned