In reconciling a bank statement,the bank balance is $1000 and the checkbook balance is $1205.Which of the following is the MOST probable reason why the checkbook balance is larger than the bank balance?
A) The bank has not cleared certain checks.
B) The bank has added interest revenue to the account balance.
C) A deposit in transit was made at the end of the month.
D) The bank received an EFT from a customer.

Question

Quizplus · Accepted Answer

A deposit in transit refers to a deposit that has been made by the company but has not yet been reflected on the bank statement. Therefore, the checkbook balance will be larger than the bank balance until the deposit is cleared by the bank. This is the most probable reason as the bank has not yet cleared the deposit made at the end of the month that is reflected in the checkbook balance but not in the bank balance. The other options - A, B, and D - would result in a bank balance that is smaller than the checkbook balance.

In Reconciling a Bank Statement,the Bank Balance Is $1000 and the Checkbook