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):
A)addition to the bank balance;outstanding deposit
B)addition to the bank balance;deposit in transit
C)subtraction from the bank balance;deposit in transit
D)subtraction from the bank balance;outstanding deposit

Question

Quizplus · Accepted Answer

Since the deposit was made after the bank prepared Johnny Company's bank statement, it would not be included in the current bank balance on the statement. This makes it an addition to the bank balance on the reconciliation. It is also considered a deposit in transit since it has been made and will eventually be recorded by the bank.

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