When preparing a bank reconciliation interest earned on a checking account is
A)added to the company's book balance.
B)deducted from the company's book balance.
C)added to the bank statement balance.
D)deducted from the bank statement balance.

Question

Quizplus · Accepted Answer

Interest earned on a checking account is an increase in the company's cash balance, which is reflected in the bank statement. Therefore, it should be added to the company's book balance to reconcile it with the bank statement balance.

When Preparing a Bank Reconciliation Interest Earned on a Checking