If a bank statement included a bank collection and related interest revenue,the journal entry to record this reconciling item would include a:

Question

Quizplus · Accepted Answer

A bank collection results in an increase in cash, so a debit to Cash is required. The related interest revenue earned would also increase the cash balance, so another debit to Cash is necessary. There is no involvement of Note Receivable or Note Payable, so options A and D can be eliminated. The credit entry would depend on the nature of the bank collection (e.g. customer payment, loan payment), but is not specified in the question.

If a Bank Statement Included a Bank Collection and Related