When preparing a bank reconciliation,which of the following would be deducted from the company's cash balance?
A)Interest income paid by the bank.
B)The dollar amount of deposits in transit.
C)The dollar amount of outstanding checks.
D)The bank service charges included on the bank statement.

Question

Quizplus · Accepted Answer

Bank service charges included on the bank statement would be deducted from the company's cash balance because it represents a decrease in the amount of cash available to the company. Interest income paid by the bank would be added to the company's cash balance. The dollar amount of deposits in transit and outstanding checks would be adjusted to reconcile the company's book balance with the bank's balance but would not be deducted from the cash balance.

When Preparing a Bank Reconciliation,which of the Following Would Be