First State Bank collected a note for Smith Company. This collection, not yet recorded in Smith's books, appears on the bank reconciliation as a(n):
A) Addition to balance per general ledger
B) Deduction from balance per bank statement
C) Addition to balance per bank statement
D) Deduction from balance per general ledger
E) None of the above

Question

Quizplus · Accepted Answer

The collection of a note by the bank on behalf of Smith Company is an addition to the balance per general ledger because it represents funds that have been added to Smith's account but not yet recorded in their books.

First State Bank Collected a Note for Smith Company