During its year-end bank reconciliation, Red River Company finds that Check No. 951 was written for $49.70 on the books, but the check was written and cleared the bank for the correct amount, $94.70.
The correct treatment on the bank reconciliation would be:

Question

Quizplus · Accepted Answer

In order to reconcile to the bank statement, the $45.00 error ($94.70 - $49.70) in recording check #951 in the general ledger must be subtracted from the general ledger cash account balance, (and $45.00 must be recoded as an expense [payment]), since $45.00 more was deducted from the bank account balance, than was deducted in the general ledger.

During Its Year-End Bank Reconciliation, Red River Company Finds That