If a company erroneously records a $500 deposit as $400 in its books,which of the following must occur when reconciling the bank statement?
A)The company will have to increase the balance per the bank statement by $100.
B)The company will have to increase the balance per the books by $100.
C)The company will have to decrease the balance per bank statement by $100.
D)The company will have to decrease the balance per the books by $100.

Question

Quizplus · Accepted Answer

If the company recorded the deposit as $400 instead of $500, the balance per books would be lower by $100. Therefore, in order to reconcile the bank statement, the company will have to increase the balance per books by $100 to match the actual deposit amount of $500.

If a Company Erroneously Records a $500 Deposit as $400