From the bank reconciliation, no entry was recorded for deposits in transit. This would cause:
A) Accounts Receivable to be overstated.
B) Accounts Receivable to be understated.
C) no impact since deposits in transit are already included in the balance per books.
D) no impact since deposits are not recorded on the books.

Question

Quizplus · Accepted Answer

Deposits in transit are amounts that have been received and recorded by the business but not yet reflected on the bank statement. Since they are already included in the company's cash balance, failing to record them in the bank reconciliation does not affect the balance per books.

From the Bank Reconciliation, No Entry Was Recorded for Deposits