X Company used the following items to complete its bank reconciliation for the month of October: ∙ Deposits in transit were $2,500.
∙ Outstanding checks totaled $1,100.
∙ Bank service charges were $10.
∙ The company correctly wrote a check for $192,but mistakenly recorded the check as $129 on its books.The bank cashed the check correctly for $192.
∙ A customer's check for $50 was returned by the bank,NSF.
How should the customer's check for $50 that was returned by the bank,NSF,be treated?

Question

Quizplus · Accepted Answer

The customer's check for $50 that was returned by the bank due to insufficient funds (NSF) should be deducted from the balance per books as it was already recorded as a cash receipt in the company's books but was subsequently reversed by the bank.

X Company Used the Following Items to Complete Its Bank