If a company made a bank deposit on September 30 that did not appear on the bank statement dated September 30, in preparing the September 30 bank reconciliation, the company should:
A) Deduct the deposit from the bank statement balance.
B) Add the deposit to the bank statement balance.
C) Send the bank a debit memorandum.
D) Deduct the deposit from the September 30 book balance and add it to the October 1 book balance.
E) Add the deposit to the book balance of cash.

Question

Quizplus · Accepted Answer

The deposit was made on September 30 but did not appear on the bank statement dated September 30. Therefore, it is likely that the deposit was made too late or the bank did not process it yet. In either case, the deposit should be added to the bank statement balance to reconcile it with the book balance of cash. Option A is incorrect because deducting the deposit from the bank statement balance would make the reconciliation inaccurate. Option C is also incorrect because a debit memorandum is used to inform the company of a decrease in its bank account, not a deposit. Option D is incorrect because it implies carrying over the deposit to the next month, which is unnecessary. Option E is partially correct because the deposit should be added to the book balance of cash, but it should also be added to the bank statement balance.

If a Company Made a Bank Deposit on September 30