While reconciling the checking account, an accountant with Sonic Corporation noticed that an error had been made in recording a check received by the company.Sonic recorded the receipt as $729 and the correct amount of the check was $279.What reconciling adjustment is required?
A) Add $450 to the company's book balance
B) Deduct $450 from the company's book balance
C) Add $450 to the bank statement balance
D) Deduct $450 from the bank statement balance

Question

Quizplus · Accepted Answer

The correct amount received was $279, but Sonic Corporation recorded the receipt as $729. Therefore, there is an overstatement of $450 ($729 - $279). To correct this error, $450 must be deducted from the company's book balance.

While Reconciling the Checking Account, an Accountant with Sonic Corporation