In preparing a bank reconciliation statement for a business with a substantial bank balance,the appropriate treatment for monthly service charge appearing on the bank statement,$45,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

The monthly service charge appearing on the bank statement is a deduction from the balance per company records, as it is a charge by the bank for its services. Therefore, it should be deducted from the balance per company records to arrive at the adjusted cash balance.

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