The May bank statement for Rental shows a balance of $6,000, but the balance per books shows a cash balance of $8,000. Other information includes: 1. A check for $190 to pay the electric bill was recorded on the books as $10.
2) Included on the bank statement was a note collected by the bank for $450 plus interest of $30.
3) Checks outstanding totaled $270.
4) Bank service charges were $60.
5) Deposits in transit were $2,510.
Which item(s) will require a journal entry to update the balance in the Cash account?
A) Checks outstanding and deposits in transit
B) Bank service charges, note collected by the bank, and deposits in transit
C) Bank service charges, note collected by the bank, and error made by the Bookkeeper
D) None of these answers is correct.

Question

Quizplus · Accepted Answer

Bank service charges, the note collected by the bank, and the error made by the bookkeeper all require a journal entry to correct the cash account balance. Checks outstanding and deposits in transit are reconciling items that explain the difference between the bank and book balances but do not require a journal entry to update the cash account.

The May Bank Statement for Rental Shows a Balance of $6,000