In comparing the canceled checks on the bank statement with the entries in the accounting records,it is found that check number 4239 for November's rent was correctly written and drawn for $7,390 but was erroneously entered in the accounting records as $3,790.When reconciling the November bank statement,the company should:
A)Deduct $3,600 from the book balance of cash.
B)Add $3,600 to the bank statement balance.
C)Add $7,390 to the book balance of cash.
D)Deduct $3,600 from the bank statement balance.
E)Add $3,600 to the book balance of cash.

Question

Quizplus · Accepted Answer

The check was recorded $3,600 less in the accounting records than it should have been. To correct this, $3,600 should be deducted from the book balance of cash.

In Comparing the Canceled Checks on the Bank Statement with the Entries