If a company erroneously records a $50 check received from a customer as $500 in its records, which of the following must occur when reconciling its bank statement?
A)The company must increase the balance per its records by $500.
B)The company must increase the balance per its records by $450.
C)The company must decrease the balance per its records by $500.
D)The company must decrease the balance per its records by $450.

Question

Quizplus · Accepted Answer

The company must decrease the balance per its records by $450 to correct the error, as it has recorded $500 instead of the actual $50 received. This adjustment aligns the company's records with the actual bank statement.

If a Company Erroneously Records a $50 Check Received from a Customer