A check issued for $890 to pay a vendor on account was recorded in the firm's records as $980; the canceled check was properly listed on the bank statement at $890. To arrive at an accurate balance on a bank reconciliation statement, the error should be:

Question

Quizplus · Accepted Answer

The error was in the firm's records, not the bank's. Since the firm recorded the payment as more than it actually was, the book balance is less than it should be. Adding the difference ($90) to the book balance corrects this error.

A Check Issued for $890 to Pay a Vendor on Account