If a bank statement includes an EFT receipt of $200 for interest, the journal entry to record this reconciling item should include a:
A) debit to Cash for $200.
B) debit to Accounts Receivable for $200.
C) credit to Cash for $200.
D) credit to Prepaid Interest for $200.

Question

Quizplus · Accepted Answer

The EFT receipt of $200 for interest increases the cash balance, so the correct journal entry is a debit to Cash for $200 to reflect the increase in cash.

If a Bank Statement Includes an EFT Receipt of $200