When Bank Errors are detected by a company on the bank statement and a bank reconciliation is prepared,what action does the company need to take to adjust its Cash account?
A)Increase the Cash account.
B)Decrease the Cash account.
C)Increase or decrease the Cash account depending on the error.
D)Take no action.

Question

Quizplus · Accepted Answer

When a company detects bank errors on the bank statement during bank reconciliation, it does not adjust its Cash account for these errors. Instead, the bank is responsible for correcting any errors on its part. The company's Cash account reflects its own record of transactions and balances, independent of errors made by the bank.

When Bank Errors Are Detected by a Company on the Bank