While reconciling the checking account, the accountant noticed that an error had been made in recording a check received by the company. The bookkeeper had recorded the receipt as $729 but the correct amount of the check was $279. Which of the following reconciling adjustments is necessary?
A)Add $450 to the company's records.
B)Deduct $450 from the company's records.
C)Add $450 to the bank statement balance.
D)Deduct $450 from the bank statement balance.

Question

Quizplus · Accepted Answer

Since the bookkeeper recorded the receipt as $729, which is $450 more than the correct amount of $279, the company's records need to be reduced by $450. This will correct the error and reconcile the books with the actual amount received. Therefore, deducting $450 from the company's records is the necessary reconciling adjustment.

While Reconciling the Checking Account, the Accountant Noticed That an Error