In preparing a bank reconciliation statement for a business with a substantial bank balance,the appropriate treatment for interest earned on account,$240,is to:
A) add it to the balance as per bank statement.
B) deduct it from the balance as per bank statement.
C) add it to the balance per company records.
D) deduct it from the balance per company records.

Question

Quizplus · Accepted Answer

Interest earned on a bank account is recorded in the company's books but not reflected in the bank statement until the end of the statement period. Therefore, it needs to be added to the balance per company records to match it with the balance as per bank statement during reconciliation.

In Preparing a Bank Reconciliation Statement for a Business with a Substantial