Johnny Company deposited $25,000 in its bank on the same day as,but after the bank prepared Johnny Company's bank statement.The deposit should appear on the bank reconciliation as a(n)________ and is called a(n):

Question

Quizplus · Accepted Answer

The deposit made by Johnny Company is not yet recorded by the bank, so it is an addition to the bank balance. Since the deposit was made on the same day as the bank statement but after it was prepared, it is a deposit in transit. Therefore, the correct choice is B – addition to the bank balance; deposit in transit.

Johnny Company Deposited $25,000 in Its Bank on the Same