On a bank reconciliation, the amount of an unrecorded bank service charge should be:
A) Added to the book balance of cash.
B) Deducted from the book balance of cash.
C) Added to the bank balance of cash.
D) Deducted from the bank balance of cash.
E) Noted in memorandum form only.

Question

Quizplus · Accepted Answer

Bank service charges are expenses that have been deducted by the bank but not yet recorded in the company's books. Therefore, to reconcile the bank statement with the company's records, these charges need to be deducted from the book balance of cash.

On a Bank Reconciliation, the Amount of an Unrecorded Bank