The bank statement for Richards Company included a debit memo for a bank service charge of $58.
Required:
a) Show the effects of recognizing the bank service charge on the financial statements by recording appropriate amounts in the financial statements model provided. Include dollar amounts of increases and decreases; for cash flow, indicate whether it is an operating activity, investing activity, or financing activity. b) Is the recognition of the bank service charge an asset source, use, or exchange transaction?
c) Prepare the journal entry that Richards should make to recognize the effects of the service charge.

Question

The bank statement for Richards Company included a debit memo for a bank service charge of $58.
Required:
a) Show the effects of recognizing the bank service charge on the financial statements by recording appropriate amounts in the financial statements model provided. Include dollar amounts of increases and decreases; for cash flow, indicate whether it is an operating activity, investing activity, or financing activity.  b) Is the recognition of the bank service charge an asset source, use, or exchange transaction?
c) Prepare the journal entry that Richards should make to recognize the effects of the service charge.

Quizplus · Accepted Answer

The Answer of The bank statement for Richards Company included a debit memo for a bank service charge of $58.
Required:
a) Show the effects of recognizing the bank service charge on the financial statements by recording appropriate amounts in the financial statements model provided. Include dollar amounts of increases and decreases; for cash flow, indicate whether it is an operating activity, investing activity, or financing activity.  b) Is the recognition of the bank service charge an asset source, use, or exchange transaction?
c) Prepare the journal entry that Richards should make to recognize the effects of the service charge.

The Bank Statement for Richards Company Included a Debit Memo