When completing a bank reconciliation, bank service charges should be added to the cash balance appearing on the bank statement.

Question

Quizplus · Accepted Answer

Bank service charges are deducted from the cash balance appearing on the bank statement, not added to it. This is because the bank has already subtracted these charges from the account balance before issuing the statement. Therefore, when completing a bank reconciliation, the bank service charges should be subtracted from the bank statement balance to arrive at the adjusted balance.

When Completing a Bank Reconciliation, Bank Service Charges Should Be